REGIONAL AND FARM-LEVEL RISK ANALYSES WITH THE SINGLE-INDEX MODEL

This paper estimates single-index model (SIM) beta coefficients for the major cash crops of Ontario's agricultural-producing counties. Beta coefficients are estimated using per acre gross revenues weighted by (1) the proportion of each crop planted in each county and (2) equal weights. The results show that sometimes substantial differences arise from these procedures. Implications for government policy and farm-level risk-management strategies are discussed. A practical approach for using SIM for farm management purposes is presented and the effects of systematic and nonsystematic risk are discussed.