Risk, Utility and the Palatabilty of Extension Advice to Farmer Groups

Officer, R.R.; Halter, A. N.; Dillon, John L.

doi:10.1111/j.1467-8489.1967.tb00037.x

Cited by 7 publications

(3 citation statements)

References 6 publications

(5 reference statements)

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“…Transmission to Australia soon followed, most notably through the work of John Dillon, following up his PhD work under Heady (Dillon and Heady ; Dillon ; Officer et al . ; Makeham et al . ).…”

Section: The Role Of Decision Theory In Agriculturementioning

confidence: 97%

Antipodean agricultural and resource economics at 60: risk and uncertainty

Quiggin

Anderson

2016

Aus J Agri & Res Econ

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Risk and uncertainty issues have been long addressed by members of AARES, reflecting the importance of the issue in agriculture, particularly in Australia. Members have been among the most innovative developers of methods and insights, around the world, as is reflected in the many publications in journals beyond the domestic shores. It seems, given the recent keen attention to such issues in the Australian literature and beyond, that, with high probability, members will continue to make strong contributions to this area of agricultural and resource economics.

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Section: The Role Of Decision Theory In Agriculturementioning

confidence: 97%

Antipodean agricultural and resource economics at 60: risk and uncertainty

Quiggin

Anderson

2016

Aus J Agri & Res Econ

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“…For an individual farmer, these risk attitudes can be summarized in a utility function, of equivalently (assuming that only the first two moments of the probability distribution of profits are important) in a set of indifference relations in the expected value--variance space of profits from possible experimental policies [5]. Although the empirieal estimation of producers' utility functions is still somewhat imperfect, real progress has been made recently in this area [6,7]. We anticipate that, at some future time, utility functions may be widely used in solving risky decision problems.…”

Section: Attitude To Riskmentioning

confidence: 99%

Economic Considerations in Response Research

Anderson

Dillon

1968

American J Agri Economics

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The general negleet of economic considerations in response researeh is noted. Following the listing of several factors which influence investment in response research, a framework is developed in whieh knowledge of a process is viewed in terms of the expected value and variance of profits. A Bayesian scheme for incorporating additional information in posterior analysis is outlined. Worth of additional information is judged in terms of utility. The seheme is used to show how the value of obtaining additional information can be aseertained ex ante in preposterior analysis by way of a Monte-Carlo approach. Both posterior and preposterior analyses ate illustrated through a soybeanJertilizer process. In this empirical example, the effects of using different experimental designs of varying size ale examined. F OR A decade or more, agricultural economists (production variety) have been urging agricultural scientists to estimate crop and livestock production functions. Such estimates, we have argued, will enable farmers to make better decisions on input and output levels in their crop and livestock production. At the same time, no overt attention has been given to the economics of conducting such research. No concrete guidance has been given as to the extent to which response processes might best be investigated in terms of costs and returns.Seemingly ah act of professional faith, our evangelizing has implied that production function estimation based on experiments with "many factors at many levels rather than many replications of a few factors" will give information of greater value than its cost. Or else, in chasing the MVP of the ith factor, we have ignored the MVP of response research itself. It is as ir the mere organization of data in a form aesthetically suited to applying production economics principles has been an end in itself. Either of these implications leaves much to be desired. Here we hope to make a start towards rectifying this situation by providing some appreciation of the economics of response research.To make the problem tractable, we confine our attention to the situation of a farmer interested in investing in his own response research. Thus, by taking the problem out of the public arena, we avoid the peripheral complications of, on the cost side, having to consider fiscal policies for the financing of public research, and interrelatedly, on the revenue side, having to assess the aggregate social benefits of public response research. Not that these macro problems are unimportant, but they can hardly be appraised without first having ah appreciation of response research in its micro aspects.* With the usual caveat, we are indebted to John Phillips for critical comments.J. R. ASDERSOI~ AND ffOItN L. DIIa~s ate, respectively, research feUow and profe, sor in the

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“…, the lower should his stocking rate be. Some empirical evidence in this regard has been presented by Officer, Halter and Dillon[25].Farm AreaEquation(3 ) implies that expected income increases linearly with Thus the criterion of maximizing expected income will treat farm area as irrelevant to the choice of stocking rate. That this may be far from the case if choice is based on utility maximization is illustrated by…”

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confidence: 99%

Risk, Utility and Stocking Rate*

McArthur¹,

Dillon²

1971

Australian Journal of Agricultural Economics

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A simple utility-based model of risky wool production is presented. Evaluation of the model indicates the effect on optimal stocking rate of changes in the degree of risk aversion, farm area, variable cost, fixed cost, wool cut, wool price, variance of wool price, climatic variability and tax rate. It is shown that the utility hypothesis implies a lower optimal stacking rate than does expected profit maximization and hence implies a discrepancy between private and public optima1 resource use which it is suggested, might be mitigated by a progressive bounty on wool production.

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Risk, Utility and the Palatabilty of Extension Advice to Farmer Groups

Cited by 7 publications

References 6 publications

Antipodean agricultural and resource economics at 60: risk and uncertainty

Antipodean agricultural and resource economics at 60: risk and uncertainty

Economic Considerations in Response Research

Risk, Utility and Stocking Rate*

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