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Indirect Utility Functions And Testable Conditions

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  • Detre, Joshua D.
  • Foster, Kenneth A.

Abstract

We develop testable hypotheses for utility maximization given risk averse producers based on a general specification of the utility function. This is a direct expansion of the model posed by Pope (1978). Empirical tests using production data with a translog specification indicate that utility maximization does not always hold.

Suggested Citation

  • Detre, Joshua D. & Foster, Kenneth A., 2004. "Indirect Utility Functions And Testable Conditions," 2004 Annual meeting, August 1-4, Denver, CO 20087, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea04:20087
    DOI: 10.22004/ag.econ.20087
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    References listed on IDEAS

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    1. Rulon D. Pope, 1982. "Empirical Estimation and Use of Risk Preferences: An Appraisal of Estimation Methods That Use Actual Economic Decisions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 64(2), pages 376-383.
    2. Barry T. Coyle, 1992. "Risk Aversion and Price Risk in Duality Models of Production: A Linear Mean-Variance Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 74(4), pages 849-859.
    3. Christensen, Laurits R & Jorgenson, Dale W & Lau, Lawrence J, 1975. "Transcendental Logarithmic Utility Functions," American Economic Review, American Economic Association, vol. 65(3), pages 367-383, June.
    4. Michele C. Marra & Gerald A. Carlson, 1990. "The Decision to Double Crop: An Application of Expected Utility Theory Using Stein's Theorem," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(2), pages 337-345.
    5. Terry Roe, 1982. "Empirical Estimation and Use of Risk Preference: Discussion," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 64(2), pages 394-396.
    6. Barry T. Coyle, 1999. "Risk Aversion and Yield Uncertainty in Duality Models of Production: A Mean-Variance Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(3), pages 553-567.
    7. Rulon D. Pope, 1978. "The Expected Utility Hypothesis and Demand-Supply Restrictions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 60(4), pages 619-627.
    8. Capalbo, Susan Marie, 1988. "Measuring The Components Of Aggregate Productivity Growth In U.S. Agriculture," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 13(01), pages 1-10, July.
    9. Quirino Paris & Michael R. Caputo & Garth J. Holloway, 1993. "Keeping the Dream of Rigorous Hypothesis Testing Alive," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 75(Special_I), pages 25-40.
    10. Rulon D. Pope, 1981. "Supply Response and the Dispersion of Price Expectations," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 63(1), pages 161-163.
    11. Barry T. Coyle, 1994. "Risk Aversion and Price Risk in Duality Models of Production: Reply," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 76(2), pages 320-323.
    12. Quirino Paris, 1988. "Long-Run Comparative Statics Under Output and Land Price Uncertainty," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 70(1), pages 133-141.
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