Premium
Safety‐First Criteria and Their Measures of Risk
Author(s) -
Bigman David
Publication year - 1996
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1243793
Subject(s) - stochastic dominance , measure (data warehouse) , risk measure , dominance (genetics) , actuarial science , economics , econometrics , risk analysis (engineering) , computer science , business , financial economics , data mining , portfolio , biochemistry , chemistry , gene
A cardinal measure of risk which represents the safety‐first criteria is defined. The functional form of that measure is determined for a subgroup of risk‐averse agents that do not have money illusion. An empirical illustration of possible applications of that measure shows a method of identifying the subgroup of agents for which a given alternative dominates the others—in a group of risky alternatives when none of these alternatives dominates any of the others according to the first and the second criteria of stochastic dominance.