Risk and Household Grain Management in Developing Countries

  title={Risk and Household Grain Management in Developing Countries},
  author={Albert Park},
A dynamic model is presented of a household’s joint production, storage, and trade decisions under price risk, region-wide and idiosyncratic yield risk, and explicit transaction costs. Balancing the goals of profit maximization and hedging against consumption price risk, grain management decisions are nonlinear, interdependent functions of the market price and household grain availability and financial wealth. Model solutions calibrated to Chinese data reveal that grain’s consumption role makes… CONTINUE READING
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