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Can Producers Place Valid and Reliable Valuations on Wool Price-Risk Information?

Author

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  • Pluske, Johanna M.
  • Fraser, Rob W.

Abstract

Using the contingent valuation method farmers in the high rainfall region of Western Australia were asked to value the information that they used to reduce risk associated with wool prices. To ascertain whether these values were both valid and reliable they were combined with additional data collected from the questionnaires and incorporated into profit functions so that farmers' attitudes towards risk could be estimated. These risk attitudes may be deemed reliable and valid providing they correspond to those estimated by other researchers. Results showed that the farmers' risk aversion coefficients were comparable to those estimated in the Australian literature. Therefore it may be argued that these farmers were able to nominate valid and reliable valuations for the information that they used.

Suggested Citation

  • Pluske, Johanna M. & Fraser, Rob W., 1995. "Can Producers Place Valid and Reliable Valuations on Wool Price-Risk Information?," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 63(02), August.
  • Handle: RePEc:ags:remaae:12327
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    File URL: http://purl.umn.edu/12327
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    References listed on IDEAS

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    1. Bardsley, Peter & Harris, Michael, 1987. "An Approach To The Econometric Estimation Of Attitudes To Risk In Agriculture," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 31(02), August.
    2. Babcock, Bruce A., 1990. "Value of Weather Information in Market Equilibrium (The)," Staff General Research Papers Archive 10592, Iowa State University, Department of Economics.
    3. Mary Jo Kealy & John F. Dovidio & Mark L. Rockel, 1988. "Accuracy in Valuation Is a Matter of Degree," Land Economics, University of Wisconsin Press, vol. 64(2), pages 158-171.
    4. W. L. Adamowicz, 1991. "Valuation of Environmental Amenities1," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 39(4), pages 609-618, December.
    5. Bond, Gary E. & Wonder, Bernard, 1980. "Risk Attitudes Amongst Australian Farmers," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 24(01), April.
    6. Freebairn, John W., 1978. "An Evaluation of Outlook Information for Australian Agricultural Commodities," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 46(03), December.
    7. Newbery, David M, 1989. "The Theory of Food Price Stabilisation," Economic Journal, Royal Economic Society, vol. 99(398), pages 1065-1082, December.
    8. Fraser, Rob W., 1992. "An Analysis Of Willingness-To-Pay For Crop Insurance," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 36(01), April.
    9. Stephen D. Reiling & Kevin J. Boyle & Marcia L. Phillips & Mark W. Anderson, 1990. "Temporal Reliability of Contingent Values," Land Economics, University of Wisconsin Press, vol. 66(2), pages 128-134.
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    Cited by:

    1. Jackson, Elizabeth & Quaddus, Mohammed & Islam, Nazrul & Stanton, John & Hoque, Zohurul, 2007. "A Multi-Disciplinary Approach For Determining Adoption Of Agricultural Price Risk Management Strategies," 81st Annual Conference, April 2-4, 2007, Reading University 7985, Agricultural Economics Society.
    2. Anderson, Jock R., 2003. "Risk in rural development: challenges for managers and policy makers," Agricultural Systems, Elsevier, vol. 75(2-3), pages 161-197.
    3. Jackson, Elizabeth & Quaddus, Mohammed & Islam, Nazrul & Hoque, Zohurul & Stanton, John, 2006. "Selling raw wool by forward contract: A qualitative analysis of the pros and cons," 2006 Conference (50th), February 8-10, 2006, Sydney, Australia 139793, Australian Agricultural and Resource Economics Society.
    4. Pannell, David J., 1999. "Uncertainty and Adoption of Sustainable Farming Systems," 1999 Conference (43th), January 20-22, 1999, Christchurch, New Zealand 124511, Australian Agricultural and Resource Economics Society.
    5. Jackson, Elizabeth & Quaddus, Mohammed & Islam, Nazrul & Stanton, John, 2008. "A mixed-method approach for determining the risk and complexity farmers associate with using forward contracts," 82nd Annual Conference, March 31 - April 2, 2008, Royal Agricultural College, Cirencester, UK 42305, Agricultural Economics Society.

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    Keywords

    Demand and Price Analysis;

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