Modeling Production Risk With A Two-Step Procedure
This study deals with modeling of production risk by means of a two-step procedure. In contrast to earlier studies of production risk, we do not immediately adopt restrictive functional forms for the risky production technology. We first test for the presence of production risk. If production risk is found to be present, the mean and risk functions are estimated separately. This allows the use of more flexible functional forms for both the mean and the risk functions than commonly found in the literature. An empirical application to Norwegian salmon farming, where restrictive specifications of the technology are rejected, demonstrates the validity of our approach. Presence of production risk many primary production sectors implies that this approach should be considered in productivity studies.
Volume (Year): 24 (1999)
Issue (Month): 02 (December)
|Contact details of provider:|| Web page: http://waeaonline.org/|
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Breusch, T S & Pagan, A R, 1979. "A Simple Test for Heteroscedasticity and Random Coefficient Variation," Econometrica, Econometric Society, vol. 47(5), pages 1287-1294, September.
- Kumbhakar, Sabul C., 1993. "Production risk, technical efficiency, and panel data," Economics Letters, Elsevier, vol. 41(1), pages 11-16.
- T. Bjørndal & K. G. Salvanes, 1995. "Gains From Deregulation? An Empirical Test For Efficiency Gains In The Norwegian Fish Farming Industry," Journal of Agricultural Economics, Wiley Blackwell, vol. 46(1), pages 113-126.
- Gourieroux, Christian & Monfort, Alain & Trognon, Alain, 1984.
"Pseudo Maximum Likelihood Methods: Theory,"
Econometric Society, vol. 52(3), pages 681-700, May.
- Wan, Guang H & Griffiths, William E & Anderson, Jock R, 1992. "Using Panel Data to Estimate Risk Effects in Seemingly Unrelated Production Functions," Empirical Economics, Springer, vol. 17(1), pages 35-49.
- Hurd, Brian H., 1994. "Yield Response And Production Risk: An Analysis Of Integrated Pest Management In Cotton," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 19(02), December.
- MacKinnon, James G, 1992. "Model Specification Tests and Artificial Regressions," Journal of Economic Literature, American Economic Association, vol. 30(1), pages 102-146, March.
- G. H. Wan & J. R. Anderson, 1990. "Estimating Risk Effects In Chinese Foodgrain Production," Journal of Agricultural Economics, Wiley Blackwell, vol. 41(1), pages 85-93.
- 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.
- Arne Hallam & Rashid M. Hassan & B. D'Silva, 1989. "Measuring Stochastic Technology for the Multi-product Firm: The Irrigated Farms of Sudan," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 37(3), pages 495-512, November.
When requesting a correction, please mention this item's handle: RePEc:ags:jlaare:30790. 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)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 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.