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Efficiency Criteria and Risk Aversion: An Empirical Evaluation

Published online by Cambridge University Press:  28 April 2015

Michael E. Wetzstein ,
Philip I. Szmedra ,
Ronald W. McClendon  and
David M. Edwards
Michael E. Wetzstein
Affiliation:
Department of Agricultural Economics, University of Georgia
Philip I. Szmedra
Affiliation:
USDA, ERS, RTD, Washington, DC
Ronald W. McClendon
Affiliation:
Department of Agricultural Engineering, University of Georgia
David M. Edwards
Affiliation:
Department of Agricultural Economics, Texas A&M University
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Abstract

A conceptual link among mean-variance (EV), stochastic dominance (SD), mean-risk (ET), and Gini mean difference (EG) is established for determining risk efficient decision sets. The theoretical relations among the various efficiency criteria are then empirically demonstrated with a soybean and wheat double-crop simulation model. Empirical results associated with extended Gini mean difference (EEG) and extended mean-absolute Gini (EEΓ) for risk analysis are encouraging.

Keywords

riskefficiency criteriaGini mean difference
Type
Notes
Information
Journal of Agricultural and Applied Economics , Volume 20 , Issue 1 , July 1988 , pp. 171 - 178
Copyright
Copyright © Southern Agricultural Economics Association 1988

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