Uncertainty and Technical Efficiency in Finnish Agriculture: A State-contingent Approach

Celine Nauges, Christopher O'Donnell and John Quiggin

No 151192, Risk and Sustainable Management Group Working Papers from University of Queensland, School of Economics

Abstract: In this article, we present one of the first real-world empirical applications of state-contingent production theory. Our state-contingent behavioral model allows us to analyze production under both inefficiency and uncertainty without regard to the nature of producer risk preferences. Using farm data for Finland, we estimate a flexible production model that permits substitutability between state-contingent outputs. We test empirically, and reject, an assumption that has been implicit in almost all efficiency studies conducted in the last three decades, namely that the production technology is output-cubical, i.e., that outputs are not substitutable between states of nature.

Keywords: Production Economics; Risk and Uncertainty (search for similar items in EconPapers)
Pages: 25
Date: 2010
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https://ageconsearch.umn.edu/record/151192/files/WPR10_02.pdf (application/pdf)

Related works:
Journal Article: Uncertainty and technical efficiency in Finnish agriculture: a state-contingent approach (2011)
Working Paper: Uncertainty and technical efficiency in Finnish agriculture: a state-contingent approach (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uqsers:151192

DOI: 10.22004/ag.econ.151192

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