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Abstract
A generalisation of previous household models is developed to include production,
consumption, storage, labour and land allocation decisions under price, yield, storage
and investment risks. Implications drawn from this model include, that consumption
can be a hedge against price risk and that supply curves are shifted by consumption
and by storage decisions. Production possibilities frontiers depend upon the
households’ aversion to risk and the allocation of land to different crops is affected
by every other decision the household makes. Using hypothetical data and focussed
on farm households in Vietnam, parameters are estimated for the model and
simulations are carried out to examine the consequences of land exchanges and shifts
in technology.