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A User-Oriented Model for Incorporating Risk into Short-Run Decisions*

Published online by Cambridge University Press:  28 April 2015

Kim B. Anderson  and
John Holt
Kim B. Anderson
Affiliation:
Department of Agricultural Economics, Oklahoma State University
John Holt
Affiliation:
Food and Resource Economics Department, University of Florida
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Extract

Decision makers, comparing production alternatives and faced with risk, normally utilize a large amount of information from many sources. To compare alternatives, information must be organized and net returns calculated. Techniques producing single value estimates, such as partial budgeting, do not adequately utilize available information, produce enough information to facilitate an adequate comparison of alternatives, or account for risk and uncertainty. Furthermore, single value techniques fail to take into account skewed probability distributions of various alternative outcomes. Decision makers need methods to analyze data when making specific recurring short-run decisions in a risky and uncertain environment.

Type
Research Article
Information
Journal of Agricultural and Applied Economics , Volume 9 , Issue 2 , December 1977 , pp. 105 - 110
Copyright
Copyright © Southern Agricultural Economics Association 1977

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Footnotes

*

The authors benefited from suggestions made by Gerald Doeksen, Cecil Maynard and John Ikerd. This work was supported by an ERS-USDA special project “Wheat Farm Management in an Environment of Risk and Uncertainty.”

References

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