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This article develops a quantile moment approach to evaluate risk exposure and to illustrate risk valuation, and then applies it to examine the relative importance of downside risk and risk mitigation options associated with a highly controlled but stochastic production system on Korean farms. The econometric approach exploits a rich panel dataset to develop consistent and robust econometric estimates of the quantile moments needed to decompose and analyse risk outcomes. The results show that about 90 per cent of the cost of risk on Korean farms comes from exposure to downside risk. We also examine how management factors can help to mitigate risk exposure outcomes. [ABSTRACT FROM AUTHOR]

This article examines the microeconomics of productivity associated with specialization/diversification in production activities, with an application to Korean rice farms. Korean rice farms tend to be very small and highly specialized. Our analysis examines the productivity effects associated with both farm size and farm specialization/diversification in Korean agriculture. Relying on farm-level panel data, the analysis studies farm productivity in a multi-input multi-output context, accounting not only for changes in inputs and technical change in rice production, but also for the role of diversification in the production of other crops in current and previous periods. We find positive but small productivity gains from farm diversification. These gains come mostly from complementarity effects across farm outputs, with minimal effect of scale economies. The positive complementarity effects work against nonconvexity effects, which provide strong productivity incentives for rice farms to specialize. [ABSTRACT FROM AUTHOR]