Response to price and production risk: The case of Australian wheat

Rambaldi, AN and Simmons, P (2000) Response to price and production risk: The case of Australian wheat. Journal of Futures Markets, 20 4: 345-359. doi:10.1002/(SICI)1096-9934(200004)20:4<345::AID-FUT3>3.0.CO;2-2


Author Rambaldi, AN
Simmons, P
Title Response to price and production risk: The case of Australian wheat
Journal name Journal of Futures Markets   Check publisher's open access policy
ISSN 0270-7314
Publication date 2000-01-01
Sub-type Article (original research)
DOI 10.1002/(SICI)1096-9934(200004)20:4<345::AID-FUT3>3.0.CO;2-2
Volume 20
Issue 4
Start page 345
End page 359
Total pages 15
Language eng
Abstract A model of Australian wheat grower supply response was specified under the constraints of price and yield uncertainty, risk aversion, partial adjustment, and quadratic costs. The model was solved to obtain area planted. The results of estimation indicate that risk arising from prices and climate have had a significant influence on producer decision making. The coefficient of relative risk aversion and short-run and long-run elasticities of supply with respect to price were calculated. Wheat growers' risk premium, expected at the start of the season for exposed price and yield risk, was 2.8 percent of revenue or 10.4 percent of profit as measured by producer surplus. (C) 2000 John Wiley & Sons, Inc.
Keyword Business, Finance
Supply Response
Uncertainty
Preferences
Models
Demand
Q-Index Code C1
Q-Index Status Provisional Code
Institutional Status Unknown

Document type: Journal Article
Sub-type: Article (original research)
Collection: School of Economics Publications
 
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Created: Mon, 13 Aug 2007, 21:40:47 EST