CERTAINTY EQUIVALENT PRICES AND PRODUCER WELFARE UNDER OUTPUT PRICE UNCERTAINTY

Producer welfare indices under price uncertainty are derived using the concept of certainty equivalent prices. In this approach the marginal cost function is used instead of the ex-ante supply function; the effects of uncertainty and risk preference are captured by certainty equivalent prices. Implications for welfare evaluation are discussed.


Issue Date:
1989
Publication Type:
Working or Discussion Paper
DOI and Other Identifiers:
Record Identifier:
https://ageconsearch.umn.edu/record/13562
PURL Identifier:
http://purl.umn.edu/13562
Total Pages:
15
Series Statement:
Staff Paper P88-40




 Record created 2017-04-01, last modified 2020-10-28

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