Measuring Producer Welfare Under Output Price Uncertainty and Risk Non-Neutrality

21 Pages Posted: 24 May 2005

See all articles by David S. Bullock

David S. Bullock

University of Illinois at Urbana-Champaign - Department of Agricultural and Consumer Economics

Philip Garcia

University of Illinois at Urbana-Champaign - Department of Agricultural and Consumer Economics

Kie-Yup Shin

National Agricultural Cooperative Federation (NACF)

Abstract

Procedures to measure the producer welfare effects of changes in an output price distribution under uncertainty are reviewed. Theory and numerical integration methods are combined to show how for any form of Marshallian risk-responsive supply, compensating variation of a change in higher moments of an output price distribution can be derived numerically. The numerical procedure enables measurement of producer welfare effects in the many circumstances in which risk and uncertainty are important elements. The practical ease and potential usefulness of the procedure is illustrated by measuring the producer welfare effects of USA rice policy.

Suggested Citation

Bullock, David S. and Garcia, Philip and Shin, Kie-Yup, Measuring Producer Welfare Under Output Price Uncertainty and Risk Non-Neutrality. Available at SSRN: https://ssrn.com/abstract=684299

David S. Bullock (Contact Author)

University of Illinois at Urbana-Champaign - Department of Agricultural and Consumer Economics ( email )

1301 W. Gregory Drive
Urbana, IL 61801
United States

Philip Garcia

University of Illinois at Urbana-Champaign - Department of Agricultural and Consumer Economics ( email )

1301 W. Gregory Drive
427 Mumford Hall
Urbana, IL 61801
United States
217-333-0644 (Phone)
217-333-5538 (Fax)

Kie-Yup Shin

National Agricultural Cooperative Federation (NACF)

Seoul
Korea
412-707 100-707 (Phone)

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