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Rationality, Price Risk, And Response


  • Seale, James L., Jr.
  • Shonkwiler, John Scott


Risk has long been recognized as potentially important in determining agricultural supply. However, supply response models have either incorporated risk in an ad hoc manner or not at all. A rational expectations supply response model incorporating price risk is developed, an estimation procedure suggested, and an empirical example presented.

Suggested Citation

  • Seale, James L., Jr. & Shonkwiler, John Scott, 1987. "Rationality, Price Risk, And Response," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 19(01), July.
  • Handle: RePEc:ags:sojoae:29317

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    References listed on IDEAS

    1. Wallis, Kenneth F, 1980. "Econometric Implications of the Rational Expectations Hypothesis," Econometrica, Econometric Society, vol. 48(1), pages 49-73, January.
    2. B. Wade Brorsen & Jean-Paul Chavas & Warren R. Grant & L. D. Schnake, 1985. "Marketing Margins and Price Uncertainty: The Case of the U.S. Wheat Market," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 67(3), pages 521-528.
    3. Eckstein, Zvi, 1984. "A Rational Expectations Model of Agricultural Supply," Journal of Political Economy, University of Chicago Press, vol. 92(1), pages 1-19, February.
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    Cited by:

    1. Epperson, James E. & Huang, Wan-Tran, 1992. "The Potential For Intraseasonal Market Flow Management Of Southeastern Sweet Potatoes," Journal of Food Distribution Research, Food Distribution Research Society, vol. 23(2), June.
    2. Chembezi, Duncan M. & Womack, Abner W., 1992. "Regional Acreage Response For U.S. Corn And Wheat: The Effects Of Government Programs," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 24(01), July.
    3. Burton, Diana M. & Love, H. Alan, 1996. "A Review of Alternative Expectations Regimes in Commodity Markets: Specification, Estimation, and Hypothesis Testing Using Structural Models," Agricultural and Resource Economics Review, Cambridge University Press, vol. 25(02), pages 213-231, October.
    4. Ghatak S. & Seale J., 2001. "Rice, Risk and Rationality: Supply Response in West Bengal, India," European Research Studies Journal, European Research Studies Journal, vol. 0(3-4), pages 155-155, July - De.
    5. Cho, Gyu D., 1992. "Estimation of a Wheat Acreage Response Function for Kansas," Staff Papers 118174, Kansas State University, Department of Agricultural Economics.
    6. Bullock, David S. & Garcia, Philip & Shin, Kie-Yup, 2005. "Measuring producer welfare under output price uncertainty and risk non-neutrality," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 49(1), March.
    7. Epperson, James E. & Huang, Wan-Tran, 1994. "The Potential For Supply Management Of Southeastern Sweet Onions," Journal of Food Distribution Research, Food Distribution Research Society, vol. 25(2), September.

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