Risk And Market Participant Behavior In The U.S. Slaughter-Cattle Market
AbstractIncomplete information generates uncertainty for market participants in the slaughter-cattle market. Buyer and seller behavior in the presence of that uncertainty is examined. Statistically significant risk premiums are charged by packers when buying slaughter cattle on either a live- or dressed-weight basis compared to buying on a grade-and-yield basis. Pratt-Arrow risk-aversion coefficients are calculated for buyers and these remain constant over all marketing methods. Sellers market cattle under all three marketing methods, suggesting producersÂ’' attitudes toward risk (risk-aversion coefficients) vary.
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Bibliographic InfoArticle provided by Western Agricultural Economics Association in its journal Journal of Agricultural and Resource Economics.
Volume (Year): 20 (1995)
Issue (Month): 01 (July)
Risk and Uncertainty;
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