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Producer Preferences for Contracts on a Risky Bioenergy Crop

Author

Listed:
  • Kwabena Krah
  • Daniel R Petrolia
  • Angelica Williams
  • Keith H Coble
  • Ardian Harri
  • Roderick M Rejesus

Abstract

We employ a choice experiment to examine producer preferences for contracts to produce a risky bioenergy crop. We develop a framework accounting for subjective risk preferences and perceptions, and heterogeneous status-quo alternatives. Results indicate that price, biorefinery harvest, and establishment cost-share have significant positive effects, whereas contract length has a negative effect. We also find evidence of significant heterogeneity in preferences for biorefinery harvest, yield insurance, and contract length. Incorporating subjective risk perception and risk preference information, as well as accounting for heterogeneous status quo alternatives improves overall model performance.

Suggested Citation

  • Kwabena Krah & Daniel R Petrolia & Angelica Williams & Keith H Coble & Ardian Harri & Roderick M Rejesus, 2018. "Producer Preferences for Contracts on a Risky Bioenergy Crop," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 40(2), pages 240-258.
  • Handle: RePEc:oup:apecpp:v:40:y:2018:i:2:p:240-258.
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    File URL: http://hdl.handle.net/10.1093/aepp/ppx034
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    References listed on IDEAS

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    Cited by:

    1. repec:eee:wdevel:v:124:y:2019:i:c:3 is not listed on IDEAS
    2. repec:ags:jlaare:273444 is not listed on IDEAS
    3. repec:oup:apecpp:v:40:y:2018:i:3:p:502-521. is not listed on IDEAS

    More about this item

    Keywords

    choice experiment; contract; preference heterogeneity; random parameters logit; risk perceptions; risk preferences; willingness to accept compensation;

    JEL classification:

    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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