Choice of utility function form: its effect on classification of risk preferences and the prediction of farmer decisions


Journal Article

In applications of expected utility analysis, researchers are confronted with a choice among several utility functional forms. Subjective utility values and probability distributions for price and yield were elicited from Sri Lankan producers of minor export crops. Exponential quadratic and cubic utility functions were estimated. The choice of functional form was found to affect both the classification of risk attitudes and the prediction of harvesting strategy. The exponential function was the best predictor of harvesting strategy because it was the best predictor of mature harvesting. All three functions were equally poor predictors of premature harvesting. © 1992.

Full Text

Duke Authors

Cited Authors

  • Zuhair, SMM; Taylor, DB; Kramer, RA

Published Date

  • January 1, 1992

Published In

Volume / Issue

  • 6 / 4

Start / End Page

  • 333 - 344

Electronic International Standard Serial Number (EISSN)

  • 1574-0862

International Standard Serial Number (ISSN)

  • 0169-5150

Digital Object Identifier (DOI)

  • 10.1016/0169-5150(92)90009-N

Citation Source

  • Scopus