An Investigation of Production Risk, Risk Preferences and Technical Efficiency: Evidence From Rainfed Lowland Rice Farms in the Philippines

Renato Villano (), Christopher O'Donnell and George E. Battese

No 12953, Working Papers from University of New England, School of Economics

Abstract: Risk plays a vital role in farmers' decisions on input allocations and, therefore, output supply. This paper provides empirical evidence on the estimation of production risk, risk preferences and technical inefficiency. An eight-year panel data set is used for 46 rice farmers from a representative rainfed lowland environment in Central Luzon, Philippines. The heteroskedastic and stochastic frontier frameworks are reconciled and extended to accommodate the risk preferences of farmers in an analysis of production risk. Results show that technical inefficiency is overstated in risky production environments where farmers are risk-averse.

Keywords: Productivity Analysis; Risk and Uncertainty (search for similar items in EconPapers)
Pages: 26
Date: 2005
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:uneewp:12953

DOI: 10.22004/ag.econ.12953

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