Optimal share contracts between pig producers
This paper analyses the economic benefits from vertical coordination in pig production (i.e. a contract between a specialised piglet and a specialised fattening pig producer) using a static model of a share contract. An empirical illustration is presented for Swedish pig producers considering the im...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
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Scientific Agricultural Society of Finland
2008-12-01
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| Series: | Agricultural and Food Science |
| Online Access: | https://journal.fi/afs/article/view/5880 |
| _version_ | 1818643777831567360 |
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| author | K. LARSÉN P. SKARGREN C.J. LAGERKVIST |
| author_facet | K. LARSÉN P. SKARGREN C.J. LAGERKVIST |
| author_sort | K. LARSÉN |
| collection | DOAJ |
| description | This paper analyses the economic benefits from vertical coordination in pig production (i.e. a contract between a specialised piglet and a specialised fattening pig producer) using a static model of a share contract. An empirical illustration is presented for Swedish pig producers considering the impact of growth rates, feed conversion efficiency and mortality rates. Moreover, the variation in pig prices and the biological variation in the growth rates of pigs are considered. Producers are assumed to be risk averse and the risk aversion concept is elaborated by obtaining the producers desired confidence level that corresponds to a given risk aversion coefficient. The results suggest that there exists a range of Pareto efficient share allocations. Potential gains in expected utility from vertical coordination compared to independent production are about 25% for both categories of producers.; |
| first_indexed | 2024-12-17T00:04:21Z |
| format | Article |
| id | doaj.art-ba513c671ef14c4692624ac0873ac511 |
| institution | Directory Open Access Journal |
| issn | 1459-6067 1795-1895 |
| language | English |
| last_indexed | 2024-12-17T00:04:21Z |
| publishDate | 2008-12-01 |
| publisher | Scientific Agricultural Society of Finland |
| record_format | Article |
| series | Agricultural and Food Science |
| spelling | doaj.art-ba513c671ef14c4692624ac0873ac5112022-12-21T22:10:59ZengScientific Agricultural Society of FinlandAgricultural and Food Science1459-60671795-18952008-12-01163Optimal share contracts between pig producersK. LARSÉNP. SKARGRENC.J. LAGERKVISTThis paper analyses the economic benefits from vertical coordination in pig production (i.e. a contract between a specialised piglet and a specialised fattening pig producer) using a static model of a share contract. An empirical illustration is presented for Swedish pig producers considering the impact of growth rates, feed conversion efficiency and mortality rates. Moreover, the variation in pig prices and the biological variation in the growth rates of pigs are considered. Producers are assumed to be risk averse and the risk aversion concept is elaborated by obtaining the producers desired confidence level that corresponds to a given risk aversion coefficient. The results suggest that there exists a range of Pareto efficient share allocations. Potential gains in expected utility from vertical coordination compared to independent production are about 25% for both categories of producers.;https://journal.fi/afs/article/view/5880 |
| spellingShingle | K. LARSÉN P. SKARGREN C.J. LAGERKVIST Optimal share contracts between pig producers Agricultural and Food Science |
| title | Optimal share contracts between pig producers |
| title_full | Optimal share contracts between pig producers |
| title_fullStr | Optimal share contracts between pig producers |
| title_full_unstemmed | Optimal share contracts between pig producers |
| title_short | Optimal share contracts between pig producers |
| title_sort | optimal share contracts between pig producers |
| url | https://journal.fi/afs/article/view/5880 |
| work_keys_str_mv | AT klarsen optimalsharecontractsbetweenpigproducers AT pskargren optimalsharecontractsbetweenpigproducers AT cjlagerkvist optimalsharecontractsbetweenpigproducers |