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Utility-Efficient Programming For Whole-Farm Planning

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  • Hardaker, J. Brian
  • Patten, Louise H.
  • Pannell, David J.

Abstract

A programming technique, utility-efficient programming, is developed for farm planning under risk. The objective function is the parametric sum of two parts of the utility function in which the degree of risk aversion varies systematically with the parameter. This technique has several advantages over those previously available: a number of types of utility functions are applicable including ones exhibiting decreasing risk aversion; the degree of risk aversion can be limited to a plausible range; the form of the distribution for activity net revenues is flexible; and the technique can be used with available algorithms. The method is illustrated using a parametric linear programming algorithm.

Suggested Citation

  • Hardaker, J. Brian & Patten, Louise H. & Pannell, David J., 1988. "Utility-Efficient Programming For Whole-Farm Planning," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 32(2-3), pages 1-10, August.
    • Handle: RePEc:ags:ajaeau:22959
    DOI: 10.22004/ag.econ.22959
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    References listed on IDEAS

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    1. Boussard, Jean-Marc, 1971. "A model of the behavior of farmers and its application to agricultural policies," European Economic Review, Elsevier, vol. 2(4), pages 436-461.
    2. Robert Neil Collender & James A. Chalfant, 1986. "An Alternative Approach to Decisions under Uncertainty Using the Empirical Moment-Generating Function," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 68(3), pages 727-731.
    3. Jock R. Anderson, 1975. "Programming For Efficient Planning Against Non‐Normal Risk," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 19(2), pages 94-107, August.
    4. K. D. Cocks, 1968. "Discrete Stochastic Programming," Management Science, INFORMS, vol. 15(1), pages 72-79, September.
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    Keywords

    Farm Management; Risk and Uncertainty;

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