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Article
Uncertainty, Risk Aversion and Risk Management for Agricultural Producers
Economic Staff Paper Series
  • GianCarlo Moschini, Iowa State
  • David Hennessy, Iowa State
Document Type
Report
Publication Date
7-1-1999
Number
319
Abstract
Uncertainty and risk are quintessential features of agricultural production. After a brief overview of the main sources of agricultural risk, we provide an exposition of expected utility theory and of the notion of risk aversion. This is followed by a basic analysis of agricultural production decisions under risk, including some comparative statics results from stylized models. Selected empirical topics are surveyed, with emphasis on risk analyses as they pertain to production decisions at the farm level. Risk management is then discussed, and a synthesis of hedging models is presented. We conclude with a detailed review of agricultural insurance, with emphasis on the moral hazard and adverse selection problems that arise in the context of crop insurance.
Published As

This report is published in Handbook of Agricultural Economics, Vol. 1, Part A, 2001, pp. 87-153.

Citation Information
GianCarlo Moschini and David Hennessy. "Uncertainty, Risk Aversion and Risk Management for Agricultural Producers" (1999)
Available at: http://works.bepress.com/giancarlo-moschini/46/