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| Bontems, Philippe; Thomas, Alban. |
| We consider a general model of regulation for a risk-averse agent who observes her private-information parameter after the contract is signed. The latter specifies a quota for input used in production, whose decomposition among different production stages is unknown to the regulator. We characterize the optimal solution to the regulator problem, under general assumptions on net expected social surplus and the agent utility function. We apply the model to the case of pollution control by an environmental agency, where the agent is a risk-averse farmer facing production risk because of nitrogen leaching, and the private-information parameter measures the soil capacity in retaining nitrogen. The farmer sequential decision model is estimated on French crop... |
| Tipo: Conference Paper or Presentation |
Palavras-chave: Environmental Economics and Policy. |
| Ano: 2001 |
URL: http://purl.umn.edu/20727 |
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| Thomas, Alban; Bontems, Philippe. |
| This paper considers an agricultural production model of sequential nitrogen application under risk. Because of random shocks between successive production stages, optimal fertilization decisions depend on the magnitude of farmers' risk aversion (risk premium), and the possibility for farmers to process information (value of information). We propose a joint estimation procedure of technology and risk aversion parameters, using a structural, simulation-based econometric technique. Parameter estimates for the representative farmer's utility function allow to compute both the value of information and the risk premium for farmers. Those account together for about 30 percent of fertilizer cost for Midwest corn producers. |
| Tipo: Conference Paper or Presentation |
Palavras-chave: Research Methods/ Statistical Methods; Risk and Uncertainty. |
| Ano: 1998 |
URL: http://purl.umn.edu/20844 |
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