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Abstract
Risk and uncertainty have been extensively studied by agricultural economists. In this paper we question (a) the predominant
use of static frameworks to formally analyse risk; (b) the predominant focus on risk aversion as the motivation for considering
risk and (c) the notion that explicitly probabilistic models are likely to be helpful to farmers in their decision making. We pose
the question: for a risk-averse farmer, what is the extra value of a recommendation derived from a model that represents risk
aversion, compared to a model based on risk neutrality? The conclusion reached is that for the types of the decision problems
most commonly modelled by agricultural economists, the extra value of representing risk aversion is commonly very little.
© 2000 Elsevier Science B.V. All rights reserved.