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Rice, risk and rationality: supply response in West Bengal, India

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  • Ghatak, Subrata

    (Kingston University London)

  • Seale, James L.

    (University of Florida)

Abstract

The main objective of this paper is to model the production and supply response in Chinese agriculture, which includes not only the standard arguments like expected prices but also risk. We extend Lin’s work [1991, 1992] by modelling supply response as a three-equation model. We fit our model to data for 28 Chinese provinces from 1970 to 1997 to determine whether national Chinese agricultural supply is price and price risk responsive. Further, we fit our model to data for North, Northeast, South and Southeast regions. Results from the three systems equations are compared to single equation estimations. At the national level, Chinese agriculture is found to be price and price risk responsive. The regional analyses suggest that significant regional differences exist. Unlike Lin, we do not find the household responsibility system (HRS) to be the dominant factor in increased yields in different regions of China.

Suggested Citation

  • Ghatak, Subrata & Seale, James L., 2001. "Rice, risk and rationality: supply response in West Bengal, India," Economics Discussion Papers 2001-1, School of Economics, Kingston University London.
    • Handle: RePEc:ris:kngedp:2001_001
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    1. Richard E. Just, 1974. "An Investigation of the Importance of Risk in Farmers' Decisions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 56(1), pages 14-25.
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    Cited by:

    1. Seale, James L. & Zhang, Lisha & Traboulsi, Mohamad R., 2013. "U.S. Import Demand and Supply Response for Fresh Tomatoes, Cantaloupes, Onions, Oranges, and Spinach," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 45(3), pages 435-452, August.
    2. Agnieszka Parkitna, 2021. "Safe Business in a Pandemic Risk Environment," European Research Studies Journal, European Research Studies Journal, vol. 0(2B), pages 68-77.
    3. Ayinde, Opeyemi Eyitayo & Bessler, David Arnold & Oni, Femi Emmanuel, 2017. "Analysis Of Supply Response And Price Risk On Rice Production In Nigeria," Journal of Agribusiness and Rural Development, University of Life Sciences, Poznan, Poland, vol. 43(1), March.

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    More about this item

    Keywords

    Supply Response; Chinese Agriculture; Risk; HRS;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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