Utility is a very useful concept, which enables economists to
model behaviour in a conceptual way, and one of the main
assumptions of traditional economic models is that humans
seek to maximize their levels of utility. However utility is
extremely difficult to use in a more practical manner –
largely because it is very hard to measure in real world situations. Recognising this challenge, economists assume that
money can act, albeit imperfectly, as a measure of the
extent to which the utility of individuals is affected by any
given change in circumstance. This reasoning leads to the
situation observed in many agricultural economic models
Animal Science2006,82: 783–790
Q2006 British Society of Animal Science
ISSN 1357-7298
DOI: 10.1017/ASC2006112
783
where farmers are assumed to maximize utility (which is
probably true), and where profit is used as a substitute for
utility (as real utility is so hard to measure). And so, through
this process, the rational profit maximizing farmer is
assumed