Eliciting farmers’ subjective probabilities,risk, and uncertainty preferences using contextualized field experiments

Subjective probabilities as well as risk and uncertainty preferences influence many farmers’ decisions. Few contextualized field experiments were recently conducted to elicit farmers’ risk preferences. Contextualized field experiments use nonabstract framings that are familiar to subjects. Despite adding of context can undermine internal validity, such experiments are increasingly used in applied economics. Contextualized field experiments were never used to elicit farmers’ uncertainty preferences. This paper aims to fill this gap in the literature. This required the development of a new approach in which uncertainty preferences were estimated while controlling for farmers’ subjective probabilities regarding future agricultural outcomes. The experiment involves Scottish farmers’ decisions to plant traditional or new potato varieties. Monetary incentives and incentive compatible elicitation techniques, such as quadratic scoring rules and certainty equivalent multiple price lists, were used. Results from the estimation of Fechner models using maximum likelihood estimation procedures show that failure to control for subjective probabilities generates an underestimation of estimated uncertainty preferences. Farmers are more averse to uncertainty than risk, and their choices are noisier under uncertainty than risk.     

The Role of Risk and Transaction Costs in Contract Design: Evidence from Farmland Lease Contracts in U.S. Agriculture

The objective of this article is to provide new empirical evidence on landlord-tenant choices of share versus cash-rent contracts in U.S. agriculture. The focus is on the contribution of explanatory variables that represent transaction costs, risk-sharing incentives, or both. An empirical model of contract choice is tested against the 1999 Agricultural Economics and Land Ownership Survey (AELOS) and finds mixed evidence for low transaction cost and risk-sharing-incentive motives for landlord-tenant choices of a share versus cash-rent contract. However, the behavior of landlords and tenants is consistent with them being risk averse. Although it is standard to control for the riskiness of the principal's task that is contracted, we find that other attributes of the landlord are an important part of a relatively complex story for U.S. land tenancy contacting. The latter results have generally been ignored in other published landlord-tenant contracting studies.     

Tournaments, Fairness, and Risk

We estimate willingness to pay (WTP) to operate under two types of contracts—tournaments (Ts) and fixed performance-standard contracts (F). Our results are consistent with the notion that subjects having social preferences for fairness and care about risk. That is, when subjects experience greater inequity under tournaments relative to fixed performance contracts, or experience greater revenue risk under tournaments, the gap between WTP for fixed performance and tournament contracts increases, ceteris paribus. Our results provide an explanation for grower dissatisfaction with tournament compensation schemes independent of possible concerns regarding opportunistic behavior by integrators.     

Share Tenancy, Ownership Structure, and Prevented Planting Claims in Crop Insurance

A conceptual model based on opportunity cost and expected utility principles establishes linkages between the likelihood of prevented planting claims in crop insurance and existing share leasing arrangements/internal farm business structures. Results of heteroskedastic probit estimation procedures indicate that simpler internal business structures and more dominant farmer–tenant leasing position can increase the probability of submitting a prevented planting claim.     

企业现金管理存在的问题与对策

介绍现金管理的主重要内容、作用,分析企业现金管理存在的问题及原因,提出完善企业现金管理的措施,从而完成企业经营的最终目标。     

地勘企业改制操作中一些实际问题的处理

地勘企业改制操作中许多实际问题的处理没有一定之规。作者结合《山东地勘局关于地勘单位所属企业进行改制的指导意见》,就企业改制的形式与方式、操作程序、资产评估、呆帐坏帐及未弥补亏损、风险抵押和财产抵押、收入分配、股权设置与转让、股东大会的表决方式等实际问题介绍了山东局的做法或规定。     

地方政府耕地保护激励契约设计研究

研究目的:运用委托代理理论探索中央政府与地方政府间耕地保护最优激励契约设计问题,为破解经济发展与耕地保护两难困境提供理论依据。研究方法:基于多任务委托代理模型对地方政府的耕地保护与经济发展任务进行了分析,并对激励契约进行了设计。研究结果:现行激励机制存在诸多缺陷,迫切要求改进。多任务激励成本相互独立下地方政府激励是绝对风险规避度、边际激励成本变化率和可观测变量方差的递减函数;多任务激励成本相互替代时,增强耕地保护激励必须弱化经济发展的激励,而完全替代时不同委托任务的边际收益必须相等。研究结论:完善地方政府激励机制,要积极推进耕地保护绩效与政绩挂钩制,建立耕地保护动态督查制度,促进政绩考核体系绿色化;完善耕地保护经济补偿机制,发挥市场机制的基础性作用。     

Joint Estimation of Risk Preferences and Technology: Flexible Utility or Futility?

A thought experiment is designed to investigate whether the structure of risk aversion (i.e., the changes in absolute or relative risk aversion associated with changes in wealth) can be estimated with reasonable precision from agricultural production data. Findings strongly suggest that typical production data are unlikely to allow identification of the structure of risk aversion. A flexible-utility parameterization is found to slightly worsen technology parameter estimates. Results also indicate that even under a restricted-utility specification, utility parameter estimates are biased. Further, their quality is much worse when shocks are not large or samples are small.     

Incentive-Compatible Pollution Control Policies under Asymmetric Information on Both Risk Preferences and Technology

This article proposes a method to accommodate asymmetric information on farmers' risk preferences in designing voluntary environmental policies. By incorporating stochastic efficiency rules in a mechanism design problem, the government can find incentive-compatible policies by knowing only the general class of risk preferences among farmers. The model also accounts for hidden information on technology types and input use. The method is applied empirically to simulate a pollution control program in New York. Results suggest that participation incentives would be inadequate for many risk-averse producers if the government does not account for the diversity in risk preferences.     

The effects of EU agricultural policy changes on farmers' risk attitudes

This analysis utilises a model of production under risk estimatedon Finnish farm-level data to measure farmers' risk attitudesin a changing policy environment. We find evidence of heterogeneousrisk preferences among farmers, as well as notable changes overtime in farmers' degree of risk aversion. This result is dueto the increase in the non-random part of farm income generatedby the policy change after Finland's European Union accession.The analysis confirms the assertion that agricultural policiesthat are decoupled from production do affect input use and cropmix through their effect on farmers' risk attitudes.     

Using Consumption and Asset Return Data to Estimate Farmers' Time Preferences and Risk Attitudes

The generalized expected utility model is fitted to U.S. farm data to estimate farm operator's time preferences and risk attitudes. The estimated farmer's utility parameters are quite 'reasonable' and exhibit high accuracy. The forward-looking expected utility model is soundly rejected in favor of the generalized expected utility paradigm. Importantly, the generalized expected utility model is also found to fit the data better than the myopic model typically used to study agricultural production under risk. Finally, U.S. farmers' relative aversion to risk appears to have diminished significantly over time.     

Effects of decoupling on the mean and variability of output

The influence of inputs on output risk in the context of agriculturalproduction decisions taken by non-risk neutral agents has beenignored by previous research assessing the effects of decoupledincome support payments in a deterministic world or risk-neutralframework. We study the impacts of decoupled payments on inputuse and on output mean and variance. Our theoretical frameworkfor studying agricultural producers' responses to lump sum paymentsallows for both output and price uncertainty and economic agents'risk attitudes. Results show the importance, in a non-risk neutralscenario, of considering the influence that economic agentshave on the stochastic component of output through input use.Our empirical application uses Kansas farm-level data to illustratethe model.     

Farms’ technical inefficiencies in the presence of government programs*

We focus on determining the impacts of government programs on farms’ technical inefficiency levels. We use Kumbhakar's stochastic frontier model that accounts for both production risks and risk preferences. Our theoretical framework shows that decoupled government transfers are likely to increase (decrease) DARA (IARA) farmers’ production inefficiencies if variable inputs are risk decreasing. However, the impacts of decoupled payments cannot be anticipated if variable inputs are risk increasing. We use farm‐level data collected in Kansas to illustrate the model.