H. Beladi et Ca. Ingene, A GENERAL EQUILIBRIUM-ANALYSIS OF RURAL-URBAN MIGRATION UNDER UNCERTAINTY, Journal of regional science, 34(1), 1994, pp. 91-103
This paper analyzes the implications of an exogenous shift in relative
prices for an economy that suffers from urban unemployment, as well a
s uncertainty, in the agricultural sector. Among other things, we show
that with agricultural uncertainty, an exogenous shift in relative pr
ices will lower agricultural profit. This result is in sharp contrast
with the conventional case of risk-neutrality or certainty where agric
ultural profit is unaffected by changes in the terms of trade.