Jointly radial and translation homothetic preferences: generalized constant risk aversion

The paper identifies the structural restrictions on preferences required for them to exhibit both translation homotheticity in particular direction and radial homotheticity. The results are illustrated by an application to an asset allocation problem in the absence of riskless asset.

Technological and financial approaches to risk management in agriculture: an integrated approach

In the present paper, risk-management problems where farmers manage risk both through production decisions and through the use of market-based and informal risk-management mechanisms are considered. It is shown that many of these problems share a common structure, and that a unified and informative treatment of a broad spectrum of risk-management tools is possible within a cost-minimisation framework, under minimal conditions on their objective functions. Fundamental results are derived that apply regardless of the producer's preference towards risks, using only the no-arbitrage condition that agricultural producers never forego any opportunity to lower costs without lowering returns.

Drought policy: a graphical analysis

The standard approach to modelling production under uncertainty has relied on the concept of the stochastic production function. In the present paper, it is argued that a state-contingent production model is more flexible and realistic. The model is applied to the problem of drought policy.

Invariant risk attitudes

Concepts of constant absolute risk aversion and constant relative risk aversion have proved useful in the analysis of choice under uncertainty, but are quite restrictive, particularly when they are imposed jointly. A generalization of constant risk aversion, referred to as invariant risk aversion is developed. Invariant risk aversion is closely related to the possibility of representing preferences over state-contingent income vectors in terms of two parameters, the mean and a linearly homogeneous, translation-invariant index of riskiness. The best-known index with such properties is the standard deviation. The properties of the capital asset pricing model, usually expressed in terms of the mean and standard deviation, may be extended to the case of general invariant preferences. (C) 2003 Elsevier Inc. All rights reserved.

Policies for saving a rare Australian glider: economics and ecology

This paper considers the economics of conserving a species with mainly non-use value, the endangered mahogany glider. Three serial surveys of Brisbane residents provide data on the knowledge of respondents about the mahogany glider. The results supply information about the attitudes of respondents to the mahogany glider, to its conservation and relevant public policies, and about variations in these factors as the knowledge of participants of the mahogany glider alters. Similarly, data are provided and analysed about the willingness to pay of respondents to conserve the mahogany glider and how it changes. Population viability analysis is applied to estimate the required habitat area for a minimum viable population of the mahogany glider to ensure at least a 95% probability of its survival for 100 years. Places are identified in Queensland where the requisite minimum area of critical habitat can be conserved. Using the survey results as a basis, the likely willingness of groups of Australians to pay for the conservation of the mahogany glider is estimated and consequently their willingness to pay for the minimum required area of its habitat. Methods for estimating the cost of protecting this habitat are outlined. Australia-wide benefits are estimated to exceed the costs. Establishing a national park containing the minimum viable population of the mahogany glider is an appealing management option. This would also be beneficial in conserving other endangered wildlife species and ecosystems. Therefore, additional economic benefits to those estimated on account of the mahogany glider itself can be obtained. (C) 2004 Elsevier Ltd. All rights reserved.

The public's knowledge of and support for conservation of Australia's tree-kangaroos and other animals

After providing background on Dendrolagus species in Australia, two consecutive surveys of Brisbane's residents are used to assess public knowledge of tree-kangaroos and the stated degree of support for their conservation in Australia. The responses of participants in Survey I are based on their pre-survey knowledge of wildlife. The same set of participants completed Survey II after being provided with additional information on all the wildlife species mentioned in Survey I. Changes in the attitudes of respondents and their degree of support for the protection and conservation of Australia's tree-kangaroos are measured, including changes in their contingent valuations and stated willingness to provide financial support for such conservation. Reasons for wanting to protect tree-kangaroos are specified and analysed. Furthermore, changes that occur in the relative importance of these reasons with increased knowledge are also examined. Support for the conservation of tree-kangaroos is found to rise with the additional knowledge supplied about all species and is compared with variations in support for protection of other mammals. Support for the conservation of Australia's less well known tropical mammals is found to increase relative to better known mammals (icons) present in temperate areas, such as koalas and red kangaroos. Possible implications of the results for government conservation policies in Australia are examined.