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Risk behaviour in the presence of government programs
[journal article]
Abstract Our paper assesses the impacts of the 1996 US Farm Bill on production decisions. We apply the expected utility model to analyze farmers' behavior under risk and assess how farmers' production decisions change in the presence of government programs. Specifically, we empirically evaluate the relative ... view more
Our paper assesses the impacts of the 1996 US Farm Bill on production decisions. We apply the expected utility model to analyze farmers' behavior under risk and assess how farmers' production decisions change in the presence of government programs. Specifically, we empirically evaluate the relative price and the risk-related effects of farm policy changes at the intensive margin of production, as well as the extra value that these policies add to farmers’ certainty equivalent. We use farm-level data collected in Kansas to estimate the model. We find evidence that decoupled government programs have only negligible impacts on production decisions.... view less
Classification
Special areas of Departmental Policy
Economic Sectors
Free Keywords
Q12; Policy; Risk; Risk preferences; Intensive margin; Extensive margin
Document language
English
Publication Year
2009
Page/Pages
33 p.
Journal
Journal of Econometrics (2009)
DOI
https://doi.org/10.1016/j.jeconom.2009.10.005
Status
Postprint; peer reviewed
Licence
PEER Licence Agreement (applicable only to documents from PEER project)