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Returns To Limited Crop Diversification

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  • Blank, Steven C.

Abstract

This study suggests a new single index model (SIM) application procedure which enables users to more easily assess the risk/return tradeoff among crop portfolios. A decision criterion is presented, based on a new crop portfolio performance measure derived here. The new procedure aids in reducing problems of data sensitivity often faced when using quadratic programming or standard SIM techniques.

Suggested Citation

  • Blank, Steven C., 1990. "Returns To Limited Crop Diversification," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 15(2), pages 1-9, December.
    • Handle: RePEc:ags:wjagec:32057
    DOI: 10.22004/ag.econ.32057
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    File URL: https://ageconsearch.umn.edu/record/32057/files/15020204.pdf
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    References listed on IDEAS

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    1. Lopez-Pereira, Miguel A. & Lowenberg-DeBoer, J. & Baker, Timothy G., 1987. "Diversification Oppertunities For Hog Producers: A Single-Index Model Application," 1987 Annual Meeting, August 2-5, East Lansing, Michigan 269989, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. William T. McSweeny & David E. Kenyon & Randall A. Kramer, 1987. "Toward an Appropriate Measure of Uncertainty in a Risk Programming Model," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 69(1), pages 87-96.
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    6. R. W. Hutchinson & D. G. McKillop, 1988. "Risk Analysis with Single-Index Portfolio Models: An Application to Farm Planning: Comment," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 70(1), pages 192-194.
    7. King, Robert P. & Lybecker, Donald W., 1983. "Flexible, Risk-Oriented Marketing Strategies For Pinto Bean Producers," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 8(2), pages 1-10, December.
    8. Pyle, David H & Turnovsky, Stephen J, 1970. "Safety-First and Expected Utility Maximization in Mean-Standard Deviation Portfolio Analysis," The Review of Economics and Statistics, MIT Press, vol. 52(1), pages 75-81, February.
    9. Gempesaw, Conrado M., II & Tambe, A.M. & Nayga, Rodolfo M., Jr. & Toensmeyer, Ulrich C., 1988. "The Single Index Market Model In Agriculture," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 17(2), pages 1-9, October.
    10. Bos, T & Newbold, P, 1984. "An Empirical Investigation of the Possibility of Stochastic Systematic Risk in the Market Model," The Journal of Business, University of Chicago Press, vol. 57(1), pages 35-41, January.
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    Cited by:

    1. Cranfield, John A.L., 2002. "Persistence Of Price-Cost Margins In The U.S. Food And Tobacco Manufacturing Industries: A Dynamic Single Index Model Approach," Journal of Food Distribution Research, Food Distribution Research Society, vol. 33(2), pages 1-16, July.
    2. Khanal, Aditya R. & Mishra, Ashok K. & Omobitan, Omobolaji, 2019. "Examining organic, agritourism,and agri-environmental diversification decisions of American farms: are these decisions interlinked?," Review of Agricultural, Food and Environmental Studies, Institut National de la Recherche Agronomique (INRA), vol. 100(1-4), October.
    3. Steven C. Blank & Jeffrey McDonald, 1996. "Preferences for crop insurance when farmers are diversified," Agribusiness, John Wiley & Sons, Ltd., vol. 12(6), pages 583-592.
    4. Lokonon, Boris Odilon Kounagbè, 2016. "Crop diversification, downside risk exposure, and crop production in the Niger basin of Benin," 2016 Fifth International Conference, September 23-26, 2016, Addis Ababa, Ethiopia 246389, African Association of Agricultural Economists (AAAE).
    5. Lee, Heera & Bogner, Christina & Lee, Saem & Koellner, Thomas, 2016. "Crop selection under price and yield fluctuation: Analysis of agro-economic time series from South Korea," Agricultural Systems, Elsevier, vol. 148(C), pages 1-11.
    6. Sudip Adhikari & Aditya R. Khanal, 2021. "Economic Sustainability and Multiple Risk Management Strategies: Examining Interlinked Decisions of Small American Farms," Sustainability, MDPI, vol. 13(4), pages 1-13, February.
    7. Tadesse, Dawit & Blank, Steven C., 2003. "Cultivar Diversity: A Neglected Risk Management Strategy," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 28(2), pages 1-16, August.
    8. Xu, Feng & Prato, Tony & Lin, Cho-Min, 1994. "Evaluation of Risk for Alternative Farming Systems in Missouri," Miscellaneous Reports 257807, University of Missouri Columbia, Department of Agricultural Economics.
    9. Blank, Steven C., 1991. "The Robustness Of Single Index Models In Crop Markets: A Multiple Index Model Test," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 16(2), pages 1-9, December.
    10. Marius Rădulescu & Constanta Rădulescu & Gheorghiţă Zbăganu, 2014. "A portfolio theory approach to crop planning under environmental constraints," Annals of Operations Research, Springer, vol. 219(1), pages 243-264, August.
    11. Turvey, Calum G., 1991. "Regional And Farm-Level Risk Analyses With The Single-Index Model," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 20(2), pages 1-8, October.

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    Keywords

    Crop Production/Industries;

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