How can allocative inefficiency reveal risk preference ? An empirical investigation on French wheat farms

Blancard , Stéphane
        INRA
        , DIJON  .
         UMR 1041 Centre d'Economie et de Sociologie Rurales Appliquées à l'Agriculture et aux Espaces Ruraux; Boussemart , Jean-Philippe
        , Lille. UMR 8179 LEM; Crainich , David
        . UMR 8179 LEM; Leleu , Hervé
        . UMR 8179 LEM

How can allocative inefficiency reveal risk preference ? An empirical investigation on French wheat farms

2008

Blancard , Stéphane (INRA , DIJON (France). UMR 1041 Centre d'Economie et de Sociologie Rurales Appliquées à l'Agriculture et aux Espaces Ruraux) | Boussemart , Jean-Philippe (Université Charles de Gaulle (Lille 3), Lille(France). UMR 8179 LEM) | Crainich , David (Centre National de la Recherche Scientifique, LIlle(France). UMR 8179 LEM) | Leleu , Hervé (Centre National de la Recherche Scientifique, LIlle(France). UMR 8179 LEM)

We focus on a simple framework on wheat producer behaviour in a context of price output uncertainty. More precisely, we establish a relationship between ex post output price level and allocative inefficiency that allows to characterize farmers’ risk preferences. Given this analysis, the connection between risk aversion and other socioeconomic variables (such as degree of output specialisation, total asset, debts, farmer’s age…) can furthermore empirically be explored. This relationship is empirically tested on an unbalanced panel including about 650 wheat producers located in the French Department of Meuse over 1992-2003.

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