A new stochastic efficiency analysis approach, called stochastic efficiency with respect to a function (SERF), that partitions a set of risky alternatives in terms of certainty equivalents (CEs) for a specified range of attitudes to risk, is applied to analyse average optimal rotation strategies...

A new non-parametric method to estimate a decision maker's coefficient of absolute risk aversion from observed economic behaviour is explained. The method uses the expected value-variance (E-V) framework and quadratic programming. An empirical illustration is given using Norwegian farm-level...

We argue for greater recognition of the risky nature of most policy decisions. In this context we discuss the gulf between public risk perceptions and attitudes and those of 'experts'. Public views of risk are often inconsistent and seemingly irrational. They nevertheless influence policy...

Because relevant historical data for farms are inevitably sparse, most risk programming studies rely on few observations. We discuss how to use available information to derive an appropriate multivariate distribution function that can be sampled for a more complete representation of the possible...

A method of stochastic dominance analysis with respect to a function (SDRF) is described and illustrated. The method, called stochastic efficiency with respect to a function (SERF), partitions a set of risky alternatives in terms of certainty equivalents for a specified range of attitudes to...

To concentrate on treating the most serious risks, methods of business risk management usually seek to identify the main risks and to assess their relative importance. Risks are typically assessed in terms of their chances of occurrence and the severity of their consequences. The assessments may...

Arrow (1965) stated that making markets for trading risk more complete can be socially beneficial. Within this perspective, we discuss the feasibility of farm revenue insurance for Australian agriculture. The feasibility is first discussed from an insurer's point of view. Well-known problems of...

Environmental, social, and economic attributes are important for the sustainability of a farming system. Resilience is also important, yet has seldom been directly considered in evaluations of economic sustainability. In economic terms, resilience has to do with the capacity of the farm business...

Because the analysis of risky choice in agriculture and rural resource management is important but difficult, we argue that there is a need for some agreed principles on how to proceed. This paper is intended as a first step to this end. We start with the proposition that the importance of risk...