For production risk with identified physical causes, the nature of risk, production characteristics, risk preference, and prices determine optimal input use. Here, a two-way classification for pairs of inputs – each input as being risk increasing or decreasing and pairs as being risk...

An alternative unconstrained expected-utility maximization model of farm debt is developed using the location-scale parameter condition that incorporates the empirically validated hypotheses of decreasing absolute and constant relative risk aversion. Simulation-optimization results based on the...

Mean-variance analysis in the form of risk programming has a long, productive history in agricultural economics research. And risk programming continues to be used despite well known theoretical results that choices based on mean-variance analysis are not consistent with choices based on...

Factors affecting the adoption of crop insurance, forward contracting, and spreading sales areanalyzed using multivariate and multinomial probit approaches that account for simultaneousadoption and/or correlation among the three risk management adoption decisions. Our empiricalresults suggest...

We review the implications of the 2007 Farm Bill for the risk management dimensions of U.S. agriculture and policy. Legislative proposals suggest significant changes in risk management policy, including the introduction of state or national revenue insurance. We also pursue an empirical analysis...

This article investigates how information from cotton yield monitors influences the perceptions of within-field yield variability of cotton producers. Using yield distribution modeling techniques and survey data from cotton producers in 11 southeastern states, we find that cotton farmers who...

This article examines the production risk effects and welfare implications of Bt corn adoption in the Philippines by specifically considering the impact of Bt on the mean, variance, and skewness of yields. Assessing the skewness effects of Bt provides further inferences about the downside risk...

The US crop insurance program previously used a simple average of equally weighted historical loss cost data to serve as the backbone for estimating crop insurance premium rates. This article develops a procedure for weighting the historical loss cost experience based on longer time-series...

This article examines the extent to which actual crop insurance indemnification behavior conforms to the theoretical predictions of two ex post moral hazard models costly state verification and costly state falsification. A nonparametric regression technique is used to estimate the crop...

This article examines farmers’ preferences for various risk management information sources. Our results suggest that information from risk management experts, in-depth materials studied on their own, and popular press outlets tend to be preferred and are ranked highly by producers. Using...