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Producer preferences for contracts on a risky bioenergy crop

Author

Listed:
  • Krah, Kwabena
  • Petrolia, Daniel
  • Williams, Angelica
  • Coble, Keith
  • Harri, Ardian
  • Rejesus, Roderick

Abstract

This study employs a stated choice experiment to identify producer preferences for contracts to produce a risky bioenergy crop. The study develops a theoretical framework that takes into account subjective risk preference and perception information while also accounting for heterogeneous status-quo (i.e., current crop) alternatives. Results from our Random Parameter Logit model indicate that price, biorefinery harvest, and establishment cost-share all had significant positive effects on the probability of a producer accepting a contract, whereas contract length have a negative effect. The study also finds evidence of significant preference heterogeneity in producer 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 in the decision framework improves overall model performance.

Suggested Citation

  • Krah, Kwabena & Petrolia, Daniel & Williams, Angelica & Coble, Keith & Harri, Ardian & Rejesus, Roderick, 2015. "Producer preferences for contracts on a risky bioenergy crop," Working Papers 212483, Mississippi State University, Department of Agricultural Economics.
  • Handle: RePEc:ags:misswp:212483
    DOI: 10.22004/ag.econ.212483
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    File URL: http://ageconsearch.umn.edu/record/212483/files/FINAL_MIS_PAPER.pdf
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    References listed on IDEAS

    as
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    Cited by:

    1. repec:ags:jlaare:273444 is not listed on IDEAS
    2. repec:eee:wdevel:v:124:y:2019:i:c:3 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

    Crop Production/Industries; Environmental Economics and Policy; Resource /Energy Economics and Policy; Risk and Uncertainty;

    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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