Tactical Opportunities, Risk Attitude and Choice of Farming Strategy: an Application of the Distribution Method
When assessing farming strategies, it is important to account for the opportunities provided for tactically adjusting to outcomes of risk. The hypothesis that accounting for tactical adjustment is more important than accounting for risk attitude was supported in this study with regard to identifying the optimal drainage recirculation strategy for an irrigated dairy farm. Failing to account for tactical adjustment would lead to a subāoptimal choice, costing the farmer about A$3 100 in present value terms. In contrast, failing to account for risk aversion would not affect the strategy chosen. The distribution method was found to be well suited to modelling tactical adjustment.
Year of publication: |
1997
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Authors: | Marshall, Graham R. ; Jones, Randall E. ; Wall, Lisa M. |
Published in: |
Australian Journal of Agricultural and Resource Economics. - Australian Agricultural and Resource Economics Society - AARES. - Vol. 41.1997, 4
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Publisher: |
Australian Agricultural and Resource Economics Society - AARES |
Keywords: | Research and Development/Tech Change/Emerging Technologies |
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