Abstract

MARTINEZ-DAMIAN, Miguel Á.; BRAMBILA-PAZ, José de J.  and  GONZALEZ-ESTRADA, Elizabeth. Income risk modeling: a copula approach. Agrociencia [online]. 2017, vol.51, n.5, pp.581-590. ISSN 2521-9766.

Randomness in price and yield affect income in agricultural activities; therefore, a risk manager must take simultaneously both sources of uncertainty into account when managing risk. Under a copula function approach, the aim of this study was to model per hectare corn income risk for the Mexican states of Sinaloa, Estado de México, Jalisco and Chiapas. The hypothesis was that the dependency between price and yield can be used to manage claims. Results showed that the amount of income claims below the 5 % percentile is lower when modeled by normal copula or t copula functions, relative to modeling price or yield claims separately.

Keywords : dependency; systematic risk; price risk.

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