DAIRY SUPPLY AND FACTOR DEMAND RESPONSE TO OUTPUT PRICE RISK: AN ECONOMETRIC ASSESSMENT

The model of production decision making for the expected utility maximizing firm under output price uncertainty is applied to a panel Pennsylvania dairy operators. The model generalized duality implemented in this paper has the advantage of generating a system of supply and variable factor demand functions that consistently account for the presence of output price risk. The application to Pennsylvania dairy operators indicates that output price risk measured by the second and third moments of individual operators' historical output price series is not an important factor in production decision making. In addition to not maximizing expected utility, these operators are not expected profit maximizers.


Issue Date:
1989-10
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/28872
Published in:
Northeastern Journal of Agricultural and Resource Economics, Volume 18, Number 2
Page range:
103-108
Total Pages:
6




 Record created 2017-04-01, last modified 2017-04-04

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