Expected Utility Analysis of Stocker Cattle Ownership Versus Contract Grazing in the Southeast
AbstractStocker cattle ownership is compared to contract grazing using stochastic simulation. Returns are evaluated for both cattle owners and caretakers in contract grazing agreements. For caretakers, contract grazing is significantly less risky than cattle ownership. Slightly to moderately risk-averse caretakers could be expected to prefer some type of contract grazing to direct ownership of cattle. For cattle owners, contracting reduces risk only slightly while significantly reducing expected returns.
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Bibliographic InfoArticle provided by Southern Agricultural Economics Association in its journal Journal of Agricultural and Applied Economics.
Volume (Year): 36 (2004)
Issue (Month): 03 (December)
contracts; expected utility; grazing; stocker calves; Q0; L1;
Find related papers by JEL classification:
- Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
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