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Estimation Of Moments And Production Decisions Under Uncertainty

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  • Elie Appelbaum
  • Aman Ullah

Abstract

The purpose of this paper is to examine production decisions under output price uncertainty. Using a nonparametric estimation technique to estimate the first four moments of the unknown price distribution and applying duality, we provide a simple empirical framework for the analysis of supply and demand decisions under price uncertainty. The model is used to examine the importance of higher moments in the firm's production decisions and to investigate underlying attitudes toward risk. © 1997 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology

Suggested Citation

  • Elie Appelbaum & Aman Ullah, 1997. "Estimation Of Moments And Production Decisions Under Uncertainty," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 631-637, November.
  • Handle: RePEc:tpr:restat:v:79:y:1997:i:4:p:631-637
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    1. Moawia Alghalith, 2003. "Hedging Output Price and Cost Uncertainty," Discussion Paper Series, School of Economics and Finance 200305, School of Economics and Finance, University of St Andrews.
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    6. Cherchye, Laurens & Van Puyenbroeck, Tom, 2007. "Profit efficiency analysis under limited information with an application to German farm types," Omega, Elsevier, vol. 35(3), pages 335-349, June.
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    9. Elie Appelbaum & Parantap Basu, 2010. "A new methodology for studying the equity premium," Annals of Operations Research, Springer, vol. 176(1), pages 109-126, April.
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    20. Stéphane Blancard & Jean-Philippe Boussemart & David Crainich & Hervé Leleu, 2008. "How can allocative inefficiency reveal risk preference? An empirical investigation on French wheat farms," Working Papers 2008-ECO-02, IESEG School of Management.
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