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Communication Dans Un Congrès Année : 2011

Measuring farmers’ risk aversion: the unknown properties of the value function

Résumé

We argue in this paper that available econometric estimates of farmers’ risk aversion do not measure true farmers’ preferences towards risky outcomes. Available analyses are mostly of static nature and indeed measure the parameters of the synthetic optimal value function rather than the deep parameters of the utility functions. We derive analytical and empirical results in a simple dynamic and stochastic framework showing that that there is not a simple relationship between utility functions and value functions when agents have many decision variables. In particular we find that the value function does not necessarily exhibit DARA when the instantaneous utility function satisfies DARA and conversely. We recommend performing dynamic econometric estimation with at least farm production and consumption data.
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Dates et versions

hal-02745492 , version 1 (03-06-2020)

Identifiants

  • HAL Id : hal-02745492 , version 1
  • PRODINRA : 326355

Citer

Ruixuan Cao, Alain Carpentier, Alexandre Gohin. Measuring farmers’ risk aversion: the unknown properties of the value function. 13. EAAE Congress: "Change and Uncertainty Challenges for Agriculture, Food and Natural Resources", European Association of Agricultural Economists (EAAE). INT., Aug 2011, zurich, Switzerland. 13 p. ⟨hal-02745492⟩

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