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Producer Risk, Product Complementarity And Product Diversification

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  • R. W. Fraser

Abstract

In this paper, a model is presented of the product diversification problem which features both producer risk aversion and product complementarity as determinants of product diversification. Although both risk aversion and product complementarity are, in the absence of the other, incentives to diversity production, when the two are present their joint influence may create a disincentive to diversification. In particular, an increase in the value of product complementarity may result in reduced product diversification for a risk‐averse producer.

Suggested Citation

  • R. W. Fraser, 1990. "Producer Risk, Product Complementarity And Product Diversification," Journal of Agricultural Economics, Wiley Blackwell, vol. 41(1), pages 103-107, January.
  • Handle: RePEc:bla:jageco:v:41:y:1990:i:1:p:103-107
    DOI: 10.1111/j.1477-9552.1990.tb00623.x
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    References listed on IDEAS

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    1. Just, Richard E & Zilberman, David, 1986. "Does the Law of Supply Hold under Uncertainty?," Economic Journal, Royal Economic Society, vol. 96(382), pages 514-524, June.
    2. Robert A. Collins & Peter J. Barry, 1986. "Risk Analysis with Single-Index Portfolio Models: An Application to Farm Planning," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 68(1), pages 152-161.
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    1. Fraser, Rob W., 1993. "Welfare Effects of and Supply Responses to Recent Australian Agricultural Policy Changes," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 61(01), pages 1-7, April.
    2. Show‐Ling Jang & Ming‐Hung Weng & Yanzhi Wang, 2005. "Industrial Diversification and Its Impact on Productivity Growth in Taiwan's Electronics Industry," Asian Economic Journal, East Asian Economic Association, vol. 19(4), pages 423-443, December.
    3. Weiss, Christoph R. & Briglauer, Wolfgang, 2000. "Determinants and Dynamics of Farm Diversification," FE Working Papers 0002, Christian-Albrechts-University of Kiel, Department of Food Economics and Consumption Studies.
    4. Culas, Richard J., 2014. "Determinants of land use in wheat production: The Australian wheat-sheep zone," 2014 Conference (58th), February 4-7, 2014, Port Macquarie, Australia 165815, Australian Agricultural and Resource Economics Society.
    5. McNamara, Kevin T. & Weiss, Christoph R., 2005. "Farm Household Income and On-and-Off Farm Diversification," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 37(1), pages 1-12, April.
    6. Brajesh Jha & Nitesh Kumar & Biswajit Mohanty, 2009. "Pattern of Agricultural Diversification in India," Development Economics Working Papers 22923, East Asian Bureau of Economic Research.
    7. Brajesh Jha & Amarnath Tripathi & Biswajit Mohanty, 2009. "Drivers of Agricultural Diversification in India, Haryana and the Greenbelt Farms of India," Development Economics Working Papers 22922, East Asian Bureau of Economic Research.
    8. Hannah Chaplin & Sophia Davidova & Matthew Gorton, 2005. "Impediments to Employment and Enterprise Diversification: evidence from small-scale farms in Poland," The Institute for International Integration Studies Discussion Paper Series iiisdp102, IIIS.

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