RISK COSTS AND THE CHOICE OF MARKET RETURN INDEX

Six measures of returns are used to estimate the most "“appropriate"” market index for southeast Kansas farms. Results suggest that localized indices are more appropriate than state indices for use as the market index. The appropriate index was used to estimate systematic and nonsystematic risk and risk costs for farm planning. Estimated risks depend on the choice of market index, whereas risk costs depend on the index choice and the risk aversion are considered. More risk-averse specialized farmers are not completely compensated for risk.


Issue Date:
1992-07
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/30732
Published in:
Journal of Agricultural and Resource Economics, Volume 17, Number 1
Page range:
80-87
Total Pages:
8




 Record created 2017-04-01, last modified 2017-11-21

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