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| Frechette, Darren L.; Wen, Fang-I. |
| Standard models of hedging behavior assume that either hedgers wish to minimize net price variation or they wish to balance variation versus profits. These models treat variation as risk and fail to distinguish between variation that is random and variation that is not random over time. Newer models of decision making differentiate between random and nonrandom variation somewhat, but they inadequately distinguish variation from risk. This paper reviews the distinctions among variation, uncertainty, and risk and calculates optimal hedge ratios for two models addressing the distinction. Empirical optimal hedge ratios typically decline toward zero when variation aversion is included in the models. These results may help explain why hedgers commonly hedge less... |
| Tipo: Conference Paper or Presentation |
Palavras-chave: Demand and Price Analysis; Marketing. |
| Ano: 2002 |
URL: http://purl.umn.edu/19062 |
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| Chang, Hung-Hao; Wen, Fang-I. |
| The objective of this paper is to investigate the differences in yield production, production efficiency, and yield risk for farmers with and without off-farm work. Using a nationwide survey of Taiwanese rice farmers, we estimate a stochastic production frontier model accommodating the technical inefficiency and the production risk simultaneously. Applying the stochastic dominance criterion to rank the estimated technical efficiency and yield risk between professional farmers and farmers with off-farm jobs, our empirical analysis shows that off-farm work is significantly associated with lower technical efficiency. Additionally, farmers with off-farm work face higher production risks. Comparing the marginal effects of input uses on technical inefficiency... |
| Tipo: Conference Paper or Presentation |
Palavras-chave: Off-farm work; Technical efficiency; Production risk; Taiwan; Crop Production/Industries; Farm Management. |
| Ano: 2008 |
URL: http://purl.umn.edu/6164 |
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