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A Simple Procedure To Evaluate Ex-Ante Producer Welfare Under Price Uncertainty

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  • Tsur, Yacov

Abstract

We propose a simple and tractable procedure for evaluating producer welfare under price uncertainty. These properties are achieved at the cost of assuming constant absolute risk aversion, where risk attitude depends on the stock of wealth but not on the flow of income. Numerical examples corroborate the procedure's properties; the validity of the constant absolute risk aversion case as an approximation is discussed.

Suggested Citation

  • Tsur, Yacov, 1991. "A Simple Procedure To Evaluate Ex-Ante Producer Welfare Under Price Uncertainty," Staff Papers 13624, University of Minnesota, Department of Applied Economics.
    • Handle: RePEc:ags:umaesp:13624
    DOI: 10.22004/ag.econ.13624
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    References listed on IDEAS

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    1. Rulon Pope & Jean-Paul Chavas & Richard E. Just, 1983. "Economic Welfare Evaluations for Producers under Uncertainty," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 65(1), pages 98-107.
    2. Douglas M. Larson, 1988. "Exact Welfare Measurement for Producers under Uncertainty," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 70(3), pages 597-603.
    3. Rothschild, Michael & Stiglitz, Joseph E., 1970. "Increasing risk: I. A definition," Journal of Economic Theory, Elsevier, vol. 2(3), pages 225-243, September.
    4. Rulon D. Pope & Jean-Paul Chavas, 1985. "Producer Surplus and Risk," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 100(Supplemen), pages 853-869.
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    Cited by:

    1. David S. Bullock & Philip Garcia & Kie‐Yup Shin, 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), pages 1-21, March.

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