Factor Price Risk and the Diffusion of Conservation Technology: Evidence from the Water Industry

Arbeitspapier

The paper examines the influence of factor price risk on factor-use efficiency through the adoption of conservation technology. The effect of a mean-preserving increase in factor price risk on optimal input-use efficiency is shown to be conditional on the own-price elasticity of factor use evaluated at the initial equilibrium. The conceptual analysis indicates that that there may be a discrepancy between the aggregate and firm-level effects of price risk on efficiency. Theoretical results are tested and confirmed using a unique data set from the water industry.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Claremont Colleges Working Papers in Economics ; No. 2001-36

Classification and Topics

• Classification: Wirtschaft ; Agricultural R&D; Agricultural Technology; Biofuels; Agricultural Extension Services ; Renewable Resources and Conservation: Water ; Criteria for Decision-Making under Risk and Uncertainty ; Multiple or Simultaneous Equation Models: Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
• Subject: technology adoption ; risk ; conservation ; water resources ; ordered probit

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Moreno, Georgina ; Sunding, David
• Event: Veröffentlichung
• (who): Claremont McKenna College, Department of Economics
• (where): Claremont, CA
• (when): 2001

Further information

• Handle: http://hdl.handle.net/10419/94582
• Last update: 10.03.2025, 11:44 AM CET