Tactical Opportunities, Risk Attitude and Choice of Farming Strategy: an Application of the Distribution Method

When assessing farming strategies, it is important to account for the opportunities provided for tactically adjusting to outcomes of risk. The hypothesis that accounting for tactical adjustment is more important than accounting for risk attitude was supported in this study with regard to identifying the optimal drainage recirculation strategy for an irrigated dairy farm. Failing to account for tactical adjustment would lead to a sub‐optimal choice, costing the farmer about A$3 100 in present value terms. In contrast, failing to account for risk aversion would not affect the strategy chosen. The distribution method was found to be well suited to modelling tactical adjustment.


Issue Date:
1997
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/118064
Published in:
Australian Journal of Agricultural and Resource Economics, Volume 41, Issue 4
Page range:
499-519
Total Pages:
21




 Record created 2017-04-01, last modified 2017-08-26

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