Choice of utility function form: its effect on classification of risk preferences and the prediction of farmer decisions
AbstractIn applications of expected utility analysis, researchers are confronted with a choice among several utility functional forms. Subjective utility values and probability distributions for price and yield were elicited from Sri Lankan producers of minor export crops. Exponential quadratic and cubic utility functions were estimated. The choice of functional form was found to affect both the classification of risk attitudes and the prediction of harvesting strategy. The exponential function was the best predictor of harvesting strategy because it was the best predictor of mature harvesting. All three functions were equally poor predictors of premature harvesting.
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Bibliographic InfoArticle provided by Blackwell in its journal Agricultural Economics.
Volume (Year): 6 (1992)
Issue (Month): 4 (April)
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Web page: http://www.blackwell-synergy.com/loi/agec
Other versions of this item:
- Zuhair, Sugu M.M. & Taylor, Daniel B. & Kramer, Randall A., 1992. "Choice of utility function form: its effect on classification of risk preferences and the prediction of farmer decisions," Agricultural Economics: The Journal of the International Association of Agricultural Economists, International Association of Agricultural Economists, vol. 6(4), April.
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- Baptiste Lelyon & Vincent Chatellier & Karine Daniel, 2011. "Decoupling and prices: determinant of dairy farmersâ€™ choices?," Working Papers 47123, Institut National de la Recherche Agronomique, France.
- Baptiste Lelyon & Vincent Chatellier & Karine Daniel, 2011. "Decoupling and prices: determinant of dairy farmers’ choices?," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement, INRA Department of Economics, vol. 92(1), pages 47-68.
- Ceddia, M.G. & Heikkil, J. & Peltola, J., 2009. "Managing invasive alien species with professional and hobby farmers: Insights from ecological-economic modelling," Ecological Economics, Elsevier, vol. 68(5), pages 1366-1374, March.
- Torkamani, Javad, 2005. "Using a whole-farm modelling approach to assess prospective technologies under uncertainty," Agricultural Systems, Elsevier, vol. 85(2), pages 138-154, August.
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