Decomposing input adjustments under price and production uncertainty
A decomposition of input adjustments for stochastic technologies is developed and applied to the case of actuarially fair production insurance. The decomposition consists of a pure-risk effect and an expansion effect which are analogous to the Hicks-Allen decomposition familiar from consumer theory.
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|Source:||American Journal of Agricultural Economics|
|01_Chambers_Decomposing_input_adjustments_2001.pdf||163.04 kB||Adobe PDF||Request a copy|