Expanding risk consideration in integrated models - the role of downside risk aversion in irrigation decisions

R. Finger

Research output: Contribution to journalArticleAcademicpeer-review

18 Citations (Scopus)

Abstract

We present a bio-economic model that accounts for the effects of water and nitrogen use on the first three moments of profit margin distributions in Swiss maize production. We thus also account for downside risks in farmers’ decision making processes, which extents currently used bio-economic modeling approaches that address agricultural water use. We find that because irrigation reduces the negative skewness of profit margin distributions, i.e. downside risk, farmers have an additional incentive to use irrigation more intensively. Not considering downside risks may thus imply an underestimation of agricultural water use.
Original languageEnglish
Pages (from-to)169-172
JournalEnvironmental Modelling & Software
Volume43
DOIs
Publication statusPublished - 2013

Keywords

  • systems
  • management
  • climate
  • sustainability
  • productivity
  • agriculture
  • uncertainty
  • variability
  • switzerland
  • technology

Fingerprint Dive into the research topics of 'Expanding risk consideration in integrated models - the role of downside risk aversion in irrigation decisions'. Together they form a unique fingerprint.

Cite this