Estimating a Production Function under Production and Output Price Risks: An Application to Beef Cattle in France
AbstractThis paper addresses the issue of agricultural production under both output level and output price risks, in a context of random climatic conditions affecting forage used in beef production. It contributes to the empirical literature by applying the framework proposed by Isik (2002) to derive estimating equations from a structural production model with two sources of risks. Flexible functional forms for risk preferences and production technology allow us to identify attitudes toward risk and compute marginal effects of inputs and climate on expected output and production risk. The model is applied on a panel of French cattle farms and estimation results suggest that cattle farmer exhibit strong risk aversion of the CRRA form, and that climate has a significant impact on the performance of animal feeding strategies.
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Bibliographic InfoPaper provided by Toulouse School of Economics (TSE) in its series TSE Working Papers with number 09-046.
Date of creation: May 2009
Date of revision:
Just and Pope; production and price uncertainty; beef cattle;
Other versions of this item:
- Claire Mosnier & Arnaud Reynaud & Alban Thomas & Michel Lherm & Jacques Agabriel, 2009. "Estimating a production function under production and output price risks: An application to beef cattle in France," LERNA Working Papers 09.10.286, LERNA, University of Toulouse.
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