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The state-contingent approach to production under uncertainty

Author

Listed:
  • John Quiggin

    (Department of Economics, University of Queensland)

  • Robert G. Chambers

    (Dept of Agricultural and Resource Economics, University of Maryland, College Park)

Abstract

Chambers and Quiggin, claim that the state-contingent approach provides the best way to think about all problems in the economics of un- certainty, including problems of consumer choice, the theory of the firm, and principal?agent relationships. The purpose of this paper is to restate this claim, and to defend it in the light of recent developments in, and applications of, the state-contingent approach.

Suggested Citation

  • John Quiggin & Robert G. Chambers, "undated". "The state-contingent approach to production under uncertainty," Risk & Uncertainty Working Papers WPR05_1, Risk and Sustainable Management Group, University of Queensland.
    • Handle: RePEc:rsm:riskun:r05_1
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    File URL: http://www.uq.edu.au/rsmg/WP/WPR05_1.pdf
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    Cited by:

    1. Makate, Clifton & Angelsen, Arild & Holden, Stein Terje & Westengen, Ola Tveitereid, 2023. "Evolution of farm-level crop diversification and response to rainfall shocks in smallholder farming: Evidence from Malawi and Tanzania," Ecological Economics, Elsevier, vol. 205(C).
    2. Ferry, Marin & de Montalembert, Jeanne, 2025. "Mitigating climate vulnerability: the crop diversification effect," Ecological Economics, Elsevier, vol. 233(C).
    3. David Adamson & Thilak Mallawaarachchi & John Quiggin, 2006. "State-contingent modelling of the Murray Darling Basin: implications for the design of property rights," Murray-Darling Program Working Papers WP2M06, Risk and Sustainable Management Group, University of Queensland.
    4. Perry, Neil & Shankar, Sriram, 2017. "The State-contingent Approach to the Noah's Ark Problem," Ecological Economics, Elsevier, vol. 134(C), pages 65-72.
    5. Sriram Shankar, 2015. "Efficiency analysis under uncertainty: a simulation study," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 59(2), pages 171-188, April.
    6. Pedro Macedo & Elvira Silva & Manuel Scotto, 2014. "Technical efficiency with state-contingent production frontiers using maximum entropy estimators," Journal of Productivity Analysis, Springer, vol. 41(1), pages 131-140, February.
    7. Serra, Teresa & Oude Lansink, Alfons, 2014. "Measuring the impacts of production risk on technical efficiency: A state-contingent conditional order-m approach," European Journal of Operational Research, Elsevier, vol. 239(1), pages 237-242.
    8. Teresa Serra & David Zilberman & José M. Gil, 2008. "Farms' technical inefficiencies in the presence of government programs ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 52(1), pages 57-76, March.
    9. Perry, Neil & Shankar, Sriram, 2025. "Allocating conservation resources between uncertain future states of nature," Ecological Economics, Elsevier, vol. 234(C).
    10. Crean, Jason & Parton, Kevin & Mullen, John & Hayman, Peter, 2015. "Valuing seasonal climate forecasts in a state-contingent manner," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 59(01), January.
    11. Wąs, Adam & Malak-Rawlikowska, Agata & Zavalloni, Matteo & Viaggi, Davide & Kobus, Paweł & Sulewski, Piotr, 2021. "In search of factors determining the participation of farmers in agri-environmental schemes – Does only money matter in Poland?," Land Use Policy, Elsevier, vol. 101(C).
    12. Carter, Chris & Crean, Jason & Kingwell, Ross S. & Hertzler, Greg, 2006. "Managing and Sharing the Risks of Drought in Australia," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25319, International Association of Agricultural Economists.
    13. Bouali Guesmi & Teresa Serra & Amr Radwan & José María Gil, 2018. "Efficiency of Egyptian organic agriculture: A local maximum likelihood approach," Agribusiness, John Wiley & Sons, Ltd., vol. 34(2), pages 441-455, March.
    14. Crean, Jason & Parton, Kevin & Mullen, John & Jones, Randall, 2013. "Representing climatic uncertainty in agricultural models – an application of state-contingent theory," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 57(3).
    15. Samson P. Katengeza & Stein T. Holden & Rodney W. Lunduka, 2019. "Adoption of Drought Tolerant Maize Varieties under Rainfall Stress in Malawi," Journal of Agricultural Economics, Wiley Blackwell, vol. 70(1), pages 198-214, February.
    16. Macedo, Pedro & Scotto, Manuel, 2014. "Cross-entropy estimation in technical efficiency analysis," Journal of Mathematical Economics, Elsevier, vol. 54(C), pages 124-130.
    17. Claire Settre & Jeff Connor & Sarah Ann Wheeler, 2017. "Reviewing the Treatment of Uncertainty in Hydro-economic Modeling of the Murray–Darling Basin, Australia," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 3(03), pages 1-35, July.
    18. Quiggin, John & Chambers, Robert G., 1998. "A state-contingent production approach to principal-agent problems with an application to point-source pollution control," Journal of Public Economics, Elsevier, vol. 70(3), pages 441-472, December.
    19. David Adamson & Adam Loch & Kurt Schwabe, 2017. "Adaptation responses to increasing drought frequency," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 61(3), pages 385-403, July.
    20. David Adamson & Thilak Mallawaarachchi & John Quiggin, 2007. "Water use and salinity in the Murray-Darling Basin: A state-contingent model ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 51(3), pages 263-281, September.
    21. Francisco Rosas & Mariana Sans, 2023. "Quantifying the value to the farmer from adopting climate risk-reducing technologies," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 28(6), pages 1-18, August.
    22. Fujimoto, Takefumi & Suzuki, Aya, 2025. "Different strategies of crop diversification between poor and non-poor farmers: Concepts and evidence from Tanzania," Ecological Economics, Elsevier, vol. 227(C).
    23. Nordblom, T.L. & Hume, I.H. & Finlayson, J.D. & Pannell, D.J. & Holland, J.E. & McClintock, A.J., 2015. "Distributional consequences of upstream tree plantations on downstream water users in a Public–Private Benefit Framework," Agricultural Systems, Elsevier, vol. 139(C), pages 271-281.
    24. Frederic Ang & Simon M. Mortimer & Francisco J. Areal & Richard Tiffin, 2018. "On the Opportunity Cost of Crop Diversification," Journal of Agricultural Economics, Wiley Blackwell, vol. 69(3), pages 794-814, September.

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