Resource allocation in a general equilibrium model of production under uncertainty

Batra, Raveendra N.

doi:10.1016/0022-0531(74)90005-2

Cited by 58 publications

(30 citation statements)

References 8 publications

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“…13. The traditional approach (theoretical and empirical) to evaluating the impact of the choice of inputs on production risk makes implicit, if not explicit, assumptions to the effect that inputs increase risk (see, e.g., Batra, 1974;Stiglitz, 1974;Bardhan, 1977). Pope (1978, 1979) who identified this restrictiveness proposed a more general stochastic specification of the production function which allows inputs to be either risk-increasing or risk-decreasing.…”

Section: Resultsmentioning

confidence: 99%

Current Issues in the Economics of Groundwater Resource Management

Koundouri

2004

Journal of Economic Surveys

182

125

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Abstract. The issue of groundwater management remains a practical concern in many regions throughout the world, while water managers continue to grapple with the question of how to manage this resource. In this article, we attempt to bring the most advanced and appropriate tools to bear on the issue of resource allocation involving groundwater. Our objective is to demonstrate the state of the art in the literature on ways to think about this complex resource and to deal with the important economic issues emanating from its complexity. We present the conceptual framework within which economists examine the elements interacting in the management of groundwater resources, indicate why the role of the market is limited with respect to the price of this very complex resource, and point to the mechanisms that can pull competitive groundwater price and quality-graded quantity of groundwater in line with their equilibrium levels. In particular, we critically review economic models of groundwater use, examine the potential for groundwater management, discuss the difficulties encountered in the estimation of the relevant control variables of such models, and identify the advantages and limitations of the instruments devised for the efficient use (allocation) of this resource. Finally, we argue that devised regulatory schemes usually ignore the information and knowledge needed for their implementation, and we suggest a core of conditions necessary for successful groundwater management reforms.

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Section: Resultsmentioning

confidence: 99%

Current Issues in the Economics of Groundwater Resource Management

Koundouri

2004

Journal of Economic Surveys

182

125

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“…Sandmo found that the sign of dz6ldy is indeterminate for a general risk-averse utility function (* is used to denote optimal values). Batra and Ullah [1974], by invoking assumptions on the firm's production function, subsequently were able to show that an increase in uncertainty leads to a decline in optimal output (and factor demands), if the firm's absolute risk-aversion function is decreasing. Coes [1977] later established the same result without the restrictions on the production function.…”

Section: Uncertainty In Output Prices and Demandmentioning

confidence: 98%

“…(Feldstein further greatly simplified his analysis by assuming that decision makers are riskneutral.) Batra [1974] represented random output in a simpler, yet more general, form as…”

Section: Uncertainty In Technologymentioning

confidence: 99%

Facility Location and the Theory of Production

Hurter

Martinich

1989

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“…45-56). Previous researchers have analyzed the effects of production uncertainty in one sector considering resource allocation in a two-sector model (Batra 1974;Britto 1980;Mills 1983). Consumer preferences (demand function) influence production (Harford and Park 1985).…”

Section: The Hayekian Trianglementioning

confidence: 99%