Cow-Calf Producer Risk Preference Impacts on Retained Ownership Strategies
AbstractConsiderable efforts have been made to provide cow-calf producers with information to help them make informed decisions about adding value to calves. Despite demonstrated market incentives to retain calves, many producers still sell right after weaning. We postulate this observed behavior is related to producer risk aversion. Our study concludes risk aversion is an important factor affecting calf retention as the most risk-averse producers have more than a 60% probability of selling calves at weaning and the most risk tolerant have less than a 20% probability of selling at weaning.
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Bibliographic InfoArticle provided by Southern Agricultural Economics Association in its journal Journal of Agricultural and Applied Economics.
Volume (Year): 43 (2011)
Issue (Month): 04 (November)
cow-calf producers; ordered probit; retained ownership; risk aversion; Farm Management; Marketing; Q13; C25; D18;
Find related papers by JEL classification:
- Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
- C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
- D18 - Microeconomics - - Household Behavior - - - Consumer Protection
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- Joost M.E. Pennings & Philip Garcia, 2001. "Measuring Producers' Risk Preferences: A Global Risk-Attitude Construct," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(4), pages 993-1009.
- Schumacher, Tucker & Schroeder, Ted C. & Tonsor, Glynn T., 2012. "Willingness-to-Pay for Calf Health Programs and Certification Agents," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 44(02), May.
- Franken, Jason R.V. & Pennings, Joost M.E. & Garcia, Philip, 2012. "Measuring Risk Attitude and Relation to Marketing Behavior," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124471, Agricultural and Applied Economics Association.
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