Uncertainty and technical efficiency in Finnish agriculture: a state-contingent approach

Celine Nauges, Christopher O'Donnell and John Quiggin

No WPR10_2, Risk & Uncertainty Working Papers from Risk and Sustainable Management Group, University of Queensland

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: state-contingent; production; uncertainty (search for similar items in EconPapers)
JEL-codes: Q10 Q24 Q25 (search for similar items in EconPapers)
Date: 2010-12
New Economics Papers: this item is included in nep-agr, nep-eff and nep-upt
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http://www.uq.edu.au/rsmg/WP/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:rsm:riskun:r10_2

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