IDEAS home Printed from https://ideas.repec.org/a/ags/aareaj/116925.html
   My bibliography  Save this article

The state-contingent approach to production under uncertainty

Author

Listed:
  • Quiggin, John C.
  • Chambers, Robert G.

Abstract

The central claim of this paper is that the state-contingent approach provides the best way to think about all problems in the economics of uncertainty, including problems of consumer choice, the theory of the firm, and principal–agent relationships. This claim is illustrated by recent developments in, and applications of, the state-contingent approach.

Suggested Citation

  • Quiggin, John C. & Chambers, Robert G., 2006. "The state-contingent approach to production under uncertainty," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 50(2), June.
  • Handle: RePEc:ags:aareaj:116925
    as

    Download full text from publisher

    File URL: http://purl.umn.edu/116925
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Robert G. Chambers & John Quiggin, 2004. "Technological and financial approaches to risk management in agriculture: an integrated approach ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 48(2), pages 199-223, June.
    2. Chambers, Robert G. & Quiggin, John, 2009. "Separability of stochastic production decisions from producer risk preferences in the presence of financial markets," Journal of Mathematical Economics, Elsevier, vol. 45(11), pages 730-737, December.
    3. Svend Rasmussen, 2003. "Criteria for optimal production under uncertainty. The state-contingent approach," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 47(4), pages 447-476, December.
    4. Christopher O’Donnell & Robert Chambers & John Quiggin, 2010. "Efficiency analysis in the presence of uncertainty," Journal of Productivity Analysis, Springer, vol. 33(1), pages 1-17, February.
    5. Robert G. Chambers & John Quiggin, 2002. "Optimal Producer Behavior in the Presence of Area-Yield Crop Insurance," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(2), pages 320-334.
    6. C. J. O'Donnell & W. E. Griffiths, 2006. "Estimating State-Contingent Production Frontiers," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(1), pages 249-266.
    7. Simon Grant & John Quiggin, 2002. "The Risk Premium for Equity: Implications for the Proposed Diversification of the Social Security Fund," American Economic Review, American Economic Association, vol. 92(4), pages 1104-1115, September.
    8. Robert Chambers & Rolf Färe & John Quiggin, 2004. "Jointly radial and translation homothetic preferences: generalized constant risk aversion," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 23(3), pages 689-699, March.
    9. Maria Racionero & John Quiggin, 2006. "Fixed Wages and Bonuses in Agency Contracts: The Case of a Continuous State Space," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 8(5), pages 761-777, December.
    10. Robert G. Chambers & John Quiggin, 2003. "Price Stabilization and the Risk-Averse Firm," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(2), pages 336-347.
    11. Chambers,Robert G. & Quiggin,John, 2000. "Uncertainty, Production, Choice, and Agency," Cambridge Books, Cambridge University Press, number 9780521622448.
    12. Quiggin, John C. & Chambers, Robert G., 2004. "Drought policy: a graphical analysis," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 48(2), June.
    13. Holmstrom, Bengt & Milgrom, Paul, 1987. "Aggregation and Linearity in the Provision of Intertemporal Incentives," Econometrica, Econometric Society, vol. 55(2), pages 303-328, March.
    14. Chambers, Robert G & Quiggin, John, 1997. "Separation and Hedging Results with State-Contingent Production," Economica, London School of Economics and Political Science, vol. 64(254), pages 187-209, May.
    15. Shogren, Jason F. & Crocker, Thomas D., 1999. "Risk and Its Consequences," Journal of Environmental Economics and Management, Elsevier, vol. 37(1), pages 44-51, January.
    16. Chambers, Robert G. & Quiggin, John, 2003. "Indirect certainty equivalents for the firm facing price and production uncertainty," Economics Letters, Elsevier, vol. 78(3), pages 309-316, March.
    17. Chambers, Robert G. & Quiggin, John, 2005. "Cost minimization and asset pricing," Risk and Sustainable Management Group Working Papers 151170, University of Queensland, School of Economics.
    18. Adamson, David & Mallawaarachchi, Thilak & Quiggin, John, 2004. "Modelling basin level allocation of water in the Murray Darling Basin in a world of uncertainty," Risk and Sustainable Management Group Working Papers 149844, University of Queensland, School of Economics.
    19. Robert G. Chambers & John Quiggin, 1998. "Cost Functions and Duality for Stochastic Technologies," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(2), pages 288-295.
    20. Quiggin, John & Chambers, R.G.Robert G., 2004. "Invariant risk attitudes," Journal of Economic Theory, Elsevier, vol. 117(1), pages 96-118, July.
    21. Quiggin, John, 1991. "Comparative Statics for Rank-Dependent Expected Utility Theory," Journal of Risk and Uncertainty, Springer, vol. 4(4), pages 339-350, December.
    22. Quiggin, John & Chambers, Robert G, 1998. "Risk Premiums and Benefit Measures for Generalized-Expected-Utility Theories," Journal of Risk and Uncertainty, Springer, vol. 17(2), pages 121-137, November.
    23. Just, Richard E. & Pope, Rulon D., 1978. "Stochastic specification of production functions and economic implications," Journal of Econometrics, Elsevier, vol. 7(1), pages 67-86, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. David Adamson & Thilak Mallawaarachchi & John Quiggin, 2007. "Water use and salinity in the Murray-Darling Basin: A state-contingent model ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 51(3), pages 263-281, September.
    2. Adamson, David & Mallawaarachchi, Thilak & Quiggin, John C., 2006. "State-contingent modelling of the Murray Darling Basin: implications for the design of property rights," 2006 Conference (50th), February 8-10, 2006, Sydney, Australia 137977, Australian Agricultural and Resource Economics Society.
    3. Serra, Teresa & Zilberman, David & Gil, Jose Maria, 2008. "Farms' technical inefficiencies in the presence of government programs," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 52(1), March.
    4. Serra, Teresa & Oude Lansink, Alfons, 2014. "Measuring the impacts of production risk on technical efficiency: A state-contingent conditional order-m approach," European Journal of Operational Research, Elsevier, vol. 239(1), pages 237-242.
    5. Crean, Jason & Parton, Kevin & Mullen, John & Jones, Randall, 2013. "Representing climatic uncertainty in agricultural models – an application of state-contingent theory," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 57(3), September.
    6. repec:wsi:wepxxx:v:03:y:2017:i:03:n:s2382624x16500429 is not listed on IDEAS
    7. Katengeza, Samson P. & Holden, Stein T. & Lunduka, Rodney W., 2016. "Adoption of Drought Tolerant Maize Varieties under Rainfall Stress in Malawi," 2016 AAAE Fifth International Conference, September 23-26, 2016, Addis Ababa, Ethiopia 246907, African Association of Agricultural Economists (AAAE).
    8. Perry, Neil & Shankar, Sriram, 2017. "The State-contingent Approach to the Noah's Ark Problem," Ecological Economics, Elsevier, vol. 134(C), pages 65-72.
    9. Macedo, Pedro & Scotto, Manuel, 2014. "Cross-entropy estimation in technical efficiency analysis," Journal of Mathematical Economics, Elsevier, vol. 54(C), pages 124-130.
    10. Nordblom, T.L. & Hume, I.H. & Finlayson, J.D. & Pannell, D.J. & Holland, J.E. & McClintock, A.J., 2015. "Distributional consequences of upstream tree plantations on downstream water users in a Public–Private Benefit Framework," Agricultural Systems, Elsevier, vol. 139(C), pages 271-281.
    11. Pedro Macedo & Elvira Silva & Manuel Scotto, 2014. "Technical efficiency with state-contingent production frontiers using maximum entropy estimators," Journal of Productivity Analysis, Springer, vol. 41(1), pages 131-140, February.
    12. Carter, Chris & Crean, Jason & Kingwell, Ross S. & Hertzler, Greg, 2006. "Managing and Sharing the Risks of Drought in Australia," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25319, International Association of Agricultural Economists.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:aareaj:116925. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search). General contact details of provider: http://edirc.repec.org/data/aaresea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.