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The Effect of Risk and Autonomy on Independent Hog Producers' Contracting Decisions

Published online by Cambridge University Press:  28 April 2015

Jeffrey M. Gillespie  and
Vernon R. Eidman
Jeffrey M. Gillespie
Affiliation:
Department of Agricultural Economics and Agribusiness at the Louisiana State University Agricultural Center
Vernon R. Eidman
Affiliation:
University of Minnesota
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Abstract

The introduction of vertical coordination in the hog industry has provided producers with new business arrangements for raising hogs. While some researchers have elicited utility functions for hog producers on the basis of income risk, none have addressed autonomy, a factor which appears to be important in business arrangement selection for independent family hog operations. In this study, a method is developed for eliciting a multi-attribute function with attributes of income and autonomy. Utility functions are elicited for a group of Minnesota farrow-to-finish hog producers. For these producers, autonomy dominated risk as the most important attribute in business arrangement selection.

Keywords

autonomycontractinghog industryrisk
Type
Articles
Information
Journal of Agricultural and Applied Economics , Volume 30 , Issue 1 , July 1998 , pp. 175 - 188
Copyright
Copyright © Southern Agricultural Economics Association 1998

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