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Effect of Risk Aversion on Feeder Cattle Prices

Published online by Cambridge University Press:  28 April 2015

Jung-Hee Lee  and
B. Wade Brorsen
Jung-Hee Lee
Affiliation:
Department of Agricultural Economics, North Dakota State University, Fargo, North Dakota
B. Wade Brorsen
Affiliation:
Department of Agricultural Economics, Oklahoma State University, Stillwater, Oklahoma
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Abstract

This paper determines the effects of cattle feeders' risk aversion on feeder cattle prices using pen data of Kansas feedlots. Higher profit risk results in lower feeder cattle prices. The elasticity of feeder cattle price with respect to profit risk was small (-0.013). The risk elasticity estimated here is similar to risk elasticities in previous studies and thus, the use of pen-level data does not seem to add much to the study of risk.

Keywords

feedlot pen dataprice expectationshedonic priceprice riskrisk aversion
Type
Articles
Information
Journal of Agricultural and Applied Economics , Volume 26 , Issue 2 , December 1994 , pp. 386 - 392
Copyright
Copyright © Southern Agricultural Economics Association 1994

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