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Article
Alternative Measures of Risk in Commodity Supply Models: An Analysis of Sow Farrowing Decisions in the United States
Journal of Agricultural and Resource Economics
  • Matthew T. Holt, University of Wisconsin-Madison
  • Giancarlo Moschini, Iowa State University
Document Type
Article
Publication Version
Published Version
Publication Date
7-1-1992
Abstract

The role of price risk in sow farrowings is investigated by using bivariate ARCH-M and GARCH-M models and a nonparametric kernel estimator. To account for the relevant time horizon of irreversible supply decisions, predictions for mean price and conditional price variance are iterated forward. The empirical results vary markedly in terms of their implications for risk response in hog supply decisions, with the ARCH-M and GARCH-M models suggesting a small and negative risk effect. Estimates of the marginal risk premium also indicate moderate and variable departures from marginal cost pricing in sow far­ rowing supply decisions.

Comments

This article is from Journal of Agricultural and Resource Economics 17 (1992): 1. Posted with permission.

Copyright Owner
Western Agricultural Economics Association
Language
en
File Format
application/pdf
Citation Information
Matthew T. Holt and Giancarlo Moschini. "Alternative Measures of Risk in Commodity Supply Models: An Analysis of Sow Farrowing Decisions in the United States" Journal of Agricultural and Resource Economics Vol. 17 Iss. 1 (1992) p. 1 - 12
Available at: http://works.bepress.com/giancarlo-moschini/77/