RISK AND MARKET PARTICIPANT BEHAVIOR IN THE U.S. SLAUGHTER-CATTLE MARKET

Incomplete information generates uncertainty for market participants in the slaughter-cattle market. Buyer and seller behavior in the presence of that uncertainty is examined. Statistically significant risk premiums are charged by packers when buying slaughter cattle on either a live- or dressed-weight basis compared to buying on a grade-and-yield basis. Pratt-Arrow risk-aversion coefficients are calculated for buyers and these remain constant over all marketing methods. Sellers market cattle under all three marketing methods, suggesting producersÂ’' attitudes toward risk (risk-aversion coefficients) vary.


Issue Date:
1995-07
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/30935
Published in:
Journal of Agricultural and Resource Economics, Volume 20, Number 1
Page range:
22-31
Total Pages:
10




 Record created 2017-04-01, last modified 2017-08-24

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