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Regional and Farm-Level Risk Analyses with the Single-Index Model

Published online by Cambridge University Press:  10 May 2017

Calum G. Turvey
Calum G. Turvey*
Affiliation:
Department of Agricultural Economics and Business, University of Guelph
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Abstract

This paper estimates single-index model (SIM) beta coefficients for the major cash crops of Ontario's agricultural-producing counties. Beta coefficients are estimated using per acre gross revenues weighted by (1) the proportion of each crop planted in each county and (2) equal weights. The results show that sometimes substantial differences arise from these procedures. Implications for government policy and farm-level risk-management strategies are discussed. A practical approach for using SIM for farm management purposes is presented and the effects of systematic and nonsystematic risk are discussed.

Type
Articles
Information
Northeastern Journal of Agricultural and Resource Economics , Volume 20 , Issue 2 , October 1991 , pp. 181 - 188
Copyright
Copyright © 1991 Northeastern Agricultural and Resource Economics Association 

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Footnotes

This research was partially funded by a grant from the Social Sciences and Humanities Research Council and the Ontario Ministry of Agriculture and Food. The author is grateful to Jim Humphrey and Inger Tai for technical assistance, and Al Weersink, Bruno Larue, two anonymous referees, and the NJARE editor for helpful review comments. All errors are the sole responsibility of the author.

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