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Measuring producer welfare under output price uncertainty and risk non-neutrality

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Author Info
David S. Bullock
Philip Garcia
Kie-Yup Shin

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Abstract

Procedures to measure the producer welfare effects of changes in an output price distribution under uncertainty are reviewed. Theory and numerical integration methods are combined to show how for any form of Marshallian risk-responsive supply, compensating variation of a change in higher moments of an output price distribution can be derived numerically. The numerical procedure enables measurement of producer welfare effects in the many circumstances in which risk and uncertainty are important elements. The practical ease and potential usefulness of the procedure is illustrated by measuring the producer welfare effects of USA rice policy. Copyright 2005 Australian Agricultural and Resource Economics Society Inc. and Blackwell Publishing Asia Pty Ltd..

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Article provided by Australian Agricultural and Resource Economics Society and Blackwell Publishing Asia Pty Ltd. in its journal The Australian Journal of Agricultural and Resource Economics.

Volume (Year): 49 (2005)
Issue (Month): 1 (03)
Pages: 1-21
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Handle: RePEc:bla:ajarec:v:49:y:2005:i:1:p:1-21

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