Hostname: page-component-cd9895bd7-jn8rn Total loading time: 0 Render date: 2024-12-26T05:56:41.029Z Has data issue: false hasContentIssue false
  • English
  • Français

Preference Among Risky Prospects Under Constant Risk Aversion

Published online by Cambridge University Press:  28 April 2015

Bruce A. McCarl
Bruce A. McCarl*
Affiliation:
Agricultural Economics at Texas A&M University
Get access Rights & Permissions [Opens in a new window]

Abstract

Risk analyses often require a measure of individual risk aversion. Here a procedure is presented to calculate risk aversion parameter ranges wherein individuals would exhibit preference among a set of risky prospects.

Keywords

expected utilityrisk aversion coefficient
Type
Submitted Articles
Information
Journal of Agricultural and Applied Economics , Volume 20 , Issue 2 , December 1988 , pp. 25 - 34
Copyright
Copyright © Southern Agricultural Economics Association 1988

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Apland, J.D., McCarl, B.A., and Miller, W.L.. “Risk and the Demand for Supplemental Irrigation: A Case Study in the Corn Belt.” Amer. J. Agr. Econ., 62(1980):142–145.CrossRefGoogle Scholar
Anderson, J.R. “Sparse Data, Estimational Reliability, and Risk-Efficient Decisions.” Amer. J. Agr. Econ., 56(1974):564–572.CrossRefGoogle Scholar
Collander, R.N., and Zilberman, D.. “Land Allocation under Uncertainty for Alternative Specifications of Return Distributions.” Amer. J. Agr. Econ. 67(1985):779–786.CrossRefGoogle Scholar
Danok, A.B., McCarl, B.A., and White, T.K.. “Machinery Selection Modeling: Incorporation of Weather Variability.” Amer. J. Agr. Econ., 62(1980):700–708.CrossRefGoogle Scholar
Day, R.H. “Probability Distributions of Field Crop Yields.” J. Farm. Econ., 47(1965):713–741.CrossRefGoogle Scholar
Freund, R.J. “The Introduction of Risk into a Programming Model.” J. Econometric. Soc, 24(1956):253–263.CrossRefGoogle Scholar
Grube, A.H. “Participation in Farm Commodity Programs: A Stochastic Dominance Analysis: Comment.” Amer. J. Agr. Econ., 68(1986):185–190.CrossRefGoogle Scholar
Hammond, J.S. “Simplifying the Choice Between Uncertain Prospects Where Preference is Nonlinear.” Mgmt. Sci., 20(1974):1047–1072.CrossRefGoogle Scholar
Karlin, S. “Polya-Type Distributions, II.” Annals Math. Stat, 28(1957):281–308.CrossRefGoogle Scholar
Klemme, R.M. “A Stochastic Dominance Comparison of Reduced Tillage Systems in Corn and Soybean Production Systems under Risk.” Amer. J. Agr. Econ., 67(1985):550–557.CrossRefGoogle Scholar
Kramer, R.A., and Pope, R.D.. “Participation in Farm Commodity Programs: A Stochastic Dominance Analysis.” Amer. J. Agr. Econ., 63(1981):119–128.CrossRefGoogle Scholar
Kramer, R.A., and Pope, R.D.. “Participation in Farm Commodity Programs: A Stochastic Dominance Analysis: Reply.” Amer. J. Agr. Econ., 68(1986):189–190.CrossRefGoogle Scholar
Lee, J.G. “Agricultural Production and Soil Conservation: An Analysis of the Finley Creek Watershed.” Unpublished M.S. Thesis, Purdue University, 1983.Google Scholar
Lee, J.G., Brown, D.J., and Lovejoy, S.. “Stochastic Efficiency Versus Mean-Variance Criteria as Predictors of Adoption of Reduced Tillage.” Amer. J. Agr. Econ., 67(1985):839–845.CrossRefGoogle Scholar
McCarl, B.A. “Generalized Stochastic Dominance: Empirical Examination.” Unpublished paper, Department of Agricultural Economics, Texas A&M University, 1988.Google Scholar
McCarl, B.A. “Riskroot Program Documentation.” Unpublished paper, Dept. of Agricultural Economics, Texas A&M University, 1987.Google Scholar
McCarl, B.A., and Bessler, D.. “Estimating an Upper Bound on the Pratt Risk Aversion Coefficient when the Utility Function is Unknown.” Forthcoming Aust. J. Agr. Econ., 1989.CrossRefGoogle Scholar
McCarl, B.A., Knight, T.O., Wilson, J.R., and Hastie, J.B.. “Stochastic Dominance over Potential Portfolios: Caution Regarding Covariance.” Amer. J. Agr. Econ., 69(1987):804–812.CrossRefGoogle Scholar
Meyer, J. “Choice Among Distributions.” J. Econ. Theory, 14(1977):326–336.CrossRefGoogle Scholar
Pope, R.D., and Ziemer, R.F.. “Stochastic Efficiency, Normality and Sampling Errors in Agricultural Risk Analysis.” Amer. J. Agr. Econ., 66(1984):31–40.CrossRefGoogle Scholar
Pratt, J.W. “Risk Aversion in the Small and in the Large.” Econometrica, 32(1964):122–136.CrossRefGoogle Scholar
Raskin, R., and Cochran, M.J.. “Interpretation and Transformations of Scale for the Pratt-Arrow Absolute Risk Aversion Coefficient: Implications for Stochastic Dominance.” West. J. Agr. Econ., 11(1986):204–210.Google Scholar
Tauer, L.W. “Life Insurance Funding of Buy-Sell Arrangements to Purchase Business Prop erty from Heirs.” No. Cent. J. Agr. Econ., 9(1987):237–246.Google Scholar
Tsaing, S. “The Rationale of the Mean-Standard Deviation Analysis, Skewness Preference and the Demand for Money.” Amer. Econ. Rev., 62(1972):354–371.Google Scholar
Yassour, J.D., Zilberman, D., and Rausser, G.C.. “Choices Among Alternative Technologies with Stochastic Yield.” Amer. J. Agr. Econ., 63(1981):718–723.CrossRefGoogle Scholar