Ziv Bar-Shira

Estimation of farmers' risk attitude: an econometric approach.

An econometric procedure for estimating Arrow-Pratt coefficients of risk aversion is derived. The model of farmers allocating land among different crops, and time between leisure and labor, allows for testing Arrows hypotheses of decreasing absolute risk aversion and increasing relative risk aversion. The empirical results support these hypotheses.

Two-moments decision models and utility-representable preferences

If a decision problem satisfies Meyers location-scale condition, then any utility-representable preferences are also representable by a mean standard deviation utility function. The properties of this function are inferred from common assumptions concerning the individuals risk preferences, without relying on the expected utility model or any of its substitutes.

Nonparametric Test of the Expected Utility Hypothesis

A nonparametric test of the expected utility hypothesis is developed in this paper. The expected utility hypothesis is shown to hold if there exists a feasible solution to a particular system of linear inequalities. Furthermore, when a feasible solution exists, boundaries on the coefficient of absolute risk aversion can be calculated explicitly. The test is applied to data on land allocations modeled as choices over lottery sets. Results, contrary to those obtained in many laboratory experiments, show that in most cases the expected utility hypothesis cannot be rejected.

Cross-Country Productivity Comparisons: The "Revealed Superiority" Approach

This paper proposes a novel non-parametric methodology for comparing total factor productivity (TFP) across countries and over time. It develops the principle of revealed superiority along the lines of Samuelsons principle of revealed preferences. Specifically, we compare the aggregate actual profits in each country to the hypothetical profits it would have earned if, facing its own prices, it had employed another countrys inputs and produced its output. We show that our procedure reveals the “true” TFP ranking under relatively mild assumptions. We apply our method by ranking a panel of the 25 richest economies relative to one another and over time and find that the United States enjoys the highest TFP whereas Singapore has the lowest.

Simple Nonparametric Tests of Technological Change: Theory and Application to U.S. Agriculture

Several nonparametric tests of technological change are proposed conditional on alternative maintained behavioral assumptions. The tests are simple as they require verification of axioms via binary comparisons that are analogous to those of the revealed preference theory. Our model allows a broad interpretation of technological changes, yet trivial rationalization of the data with either profit-maximization or cost-minimization behavior is excluded. The tests are applied to study the U.S. aggregate agricultural data, supporting the hypotheses of rankable and neutral Technological Variations. Copyright 1999, Oxford University Press.

Labour on the family farm: A theory under uncertainty - an extension

In a framework developed by P.J. Dawson, the effects of output price risk on the family labour supply and its demand for hired labour are investigated. In particular, the effects of changes in autonomous income, expected output price, family composition, and farm size are studied. Comparative statics is used to sign these effects, revealing the importance of the behavior of the measures of absolute, relative and partial risk aversion in determining them. It is shown that some of the effects may be determined only via empirical research.

Nonparametric analysis of pooled production data

Abstract A nonparametric approach which accounts for cross-sectional time-series technological variations is presented. It is useful for testing behavioral and technological assumptions, based on pooled production data. The tests require only netput and price data, and are implementable via a simple pair-wise comparison algorithm.