Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/94582
Authors: 
Moreno, Georgina
Sunding, David
Year of Publication: 
2001
Series/Report no.: 
Claremont Colleges Working Papers in Economics 2001-36
Abstract: 
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.
Subjects: 
technology adoption
risk
conservation
water resources
ordered probit
JEL: 
Q16
Q25
D81
C35
Document Type: 
Working Paper

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