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Actualisation, risque et cacao. Les insuffisances de la théorie

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  • Alary, Véronique
  • Boussard, Jean-Marc

Abstract

Given observed prices, current rates of discount seldom produce positive present values for forest investments. Especially in LDC's, where rates of interest are high, a «rational» investor should remove trees, and plant annual crops. Yet, it is not unusual to find tree planting farmers. In order to explain such behavior, one is forced to admit that the preference to present against futures consumption is less important than assumed by current theory, and should perhaps be replaced by dynamic risk aversion. These remarks are illustrated by a survey and a multi-period model of Cameroon cocoa planters. It is shown that the predictions of current theory are not conformable with observed facts. On the other hand, by endogenously defining the rate of discount from risk consideration, a better fit to reality is obtained.

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  • Alary, Véronique & Boussard, Jean-Marc, 2000. "Actualisation, risque et cacao. Les insuffisances de la théorie," Économie rurale, French Society of Rural Economics (SFER Société Française d'Economie Rurale), vol. 259.
    • Handle: RePEc:ags:ersfer:355013
    DOI: 10.22004/ag.econ.355013
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    1. Binswanger, Hans P, 1981. "Attitudes toward Risk: Theoretical Implications of an Experiment in Rural India," Economic Journal, Royal Economic Society, vol. 91(364), pages 867-890, December.
    2. Majumdar, Mukul & Zilcha, Itzhak, 1987. "Optimal growth in a stochastic environment: Some sensitivity and turnpike results," Journal of Economic Theory, Elsevier, vol. 43(1), pages 116-133, October.
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    1. Ridier, Aude, 2004. "Les effets du découplage des aides directes sur des exploitations de viande bovine en présence de risque," Économie rurale, French Society of Rural Economics (SFER Société Française d'Economie Rurale), vol. 279.

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