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Re: Stochastic dominance
On Tue, 7 May 1996 jourdain@cirad.fr wrote:
> Dear Colleagues,
> I am currently trying to make an inventory of the different modelling
techniques to apprehend the influence of risk and/or uncertainty on the
decision of farmers.
> I have been across several articles using the 'stochastic dominance'
approach. I understand this is a family of procedures (first, second, third
degree, and related to a function), and I understand the theory behind
it. However, I have not been able to find any piece of information on
commercial softwares allowing to apply this technique.
> Could anyone, with an experience on this method could help me out on this ?
---- reply ---
Damien,
You need to contact the authors of the articles to find out what
software package they used. Various public domain software is
available. Stochastic dominance was widely used during the 80's
and references are available in the ag. economics literature of that
period. The Southern Regional Risk group put out a project report every
year and Dr. Bruce McCarl of Texas A&M agricultural economics put out a
bibliography on disk of all the risk references available.
The problem with stochastic dominance is: What if there is not a
clearly dominant solution? What if the distributions (pdfs) cross at some
point? Bruce McCarl and Dave Bessler of Texas A&M Universities,
Department of Agricultural Economics have a software program that looks
at Risk Aversion Coefficients (RACS) and Break-Even Risk Aversion
Coefficients (BRACS), in the case where there is no clear dominance. In
other words, it looks at stochastic dominance with respect to a range of
risk preferences or risk aversion. Contact Dr. McCarl or Dr. Bessler and
they may send you a copy of the program. Also, they had several Ag.
Economics articles published on the subject. I also believe that Dr.
James Richardson of the same department developed a stochastic dominance
software package called STODOM(?). I don't know if any of these have
entered the commercial arena, maybe you can work out something with
them? Check out the U.S. Ag. Economics literature in any case.
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Jim Novak, Extension Economist and Professor
Dept. of Ag. Economics & Rural Soc.
Rm 304 Comer
Auburn University, AL 36849
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