The Risk Analysis in the Agricultural Enterprises using Earnings at Risk Method
AbstractThe paper examines the potential of stochastic simulation methods and Earnings at Risk method in risk analysis of farming business. The results revealed a different nature of yield and price risks in agriculture. The natural yields are low spatially correlated and the rate of yield risk depends on the climate and weather features, soil properties, technology of production and other predominantly natural variables. Estimates of yield probability distribution require the most individualized data. Price risk has higher spatial correlation. The case study illustrates that the Monte Carlo simulation and Earnings at Risk method are suitable tools for risk analysis in econometric models at the farm level as well as at the aggregate level.
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Bibliographic InfoArticle provided by University of Economics, Prague in its journal Ekonomika a Management.
Volume (Year): 2009 (2009)
Issue (Month): 3 ()
Postal: Redakce Ekonomika a management, Vysoká škola ekonomická v Praze, nám. W. Churchilla 4, 130 67 Praha 3
Find related papers by JEL classification:
- G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance
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