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Risk and Agricultural Land Use: A Reformulation of the Portfolio‐Theoretic Approach to the Analysis of a von Thünen Economy
Author(s) -
Macmillan W. D.
Publication year - 1992
Publication title -
geographical analysis
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.773
H-Index - 65
eISSN - 1538-4632
pISSN - 0016-7363
DOI - 10.1111/j.1538-4632.1992.tb00257.x
Subject(s) - portfolio , agriculture , economics , modern portfolio theory , financial economics , geography , archaeology
This paper extends the portfolio‐theoretic approach to a von Thünen economy. It presents the farmer's decision problem as a mean‐variance mathematical program, then examines the effect of increasing risk or risk aversion on land use. Risk seeking and the effect of competition on risk taking are also considered.