This paper investigates the assessment and effects of adverse shocks on agricultural production, with an application to corn yield. Adverse shocks are assessed by the probability of facing low yields, i.e. by the probability of being exposed to downside risk. Defined in terms of willingness‐to‐pay to eliminate risk, the ex‐ante cost of facing adverse events is evaluated under prospect theory. Prospect theory is relevant in the evaluation of adverse shocks as it identifies a role for both loss aversion and oversensitivity to low probability events. The analysis is applied to experimental data on corn yield in the US Corn Belt. Estimates show how the distribution of corn yield is affected by management and technology. Implications for the cost of adverse shocks are examined. The results show how management and technology can reduce exposure to adverse shocks and lower the cost of risk in agriculture.

中文翻译：

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农业不利冲击：下行风险的评估与管理

本文研究了负面冲击对农业生产的评估和影响，并将其应用于玉米产量。通过面对低收益的可能性，即通过承受下行风险的可能性，来评估不利冲击。根据消除风险的支付意愿来定义，应对不良事件的事前成本根据前景理论进行评估。前景理论与不良冲击的评估相关，因为它确定了损失规避和对低概率事件过度敏感的作用。该分析被应用于美国玉米带中玉米产量的实验数据。估算显示出玉米产量的分布如何受到管理和技术的影响。研究了不利电击成本的含义。