Case with no risk aversion | Risk Target-MOTAD | |
Cropping pattern | 16 ha of durum wheat 108 ha of sunflower 100 ha of seed cabbage |
100 ha of durum wheat 48 ha of seed maize 17 ha of seed cucumber 35 ha of seed cabbage |
Land rental | 24 ha | 0 |
Average income | 469 320 | 360 495 |
Minimum income (state of nature) | -732 029 (E7) | 60 000 (E1) |
Standard deviation | 650 654 | 221 934 |
Hired labour | 408 heures | 416 heures |
In the case of a risk model, and particularly a target MOTAD model, the standard deviation is lower than in the same model with no risk factor. Indeed, taking risk aversion into account leads the model to opt for solutions in which incomes are less significant but closer to one another. This can be observed for example in the minimum income with -732029 in the model with no risk aversion versus 60000 in the model with the risk factor.
The farmer will stop renting land in the Target MOTAD model and will diversify her cropping patterns.
If you did not manage to write the model or in order to check whether your equations are accurate, compare with the following model : modelEco_lauragaisTargetMOTAD.gms.