A real options analysis of coffee planting in Vietnam
AbstractVietnam grew from an insignificant to the world's second largest coffee producer during the 1990s. To understand this growth, this article examines Vietnamese coffee growers' investment decisions using real options theory. The study finds that producers, with variable costs of 19 cents/lb and total cost of 29.3 cents/lb, would enter coffee production at a coffee price of 47 cents/lb and exit at a coffee price of 14 cents/lb. Most Vietnamese growers appear to be sufficiently efficient to continue producing coffee even at relatively depressed price levels. Copyright 2006 International Association of Agricultural Economists.
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Bibliographic InfoArticle provided by International Association of Agricultural Economists in its journal Agricultural Economics.
Volume (Year): 35 (2006)
Issue (Month): 1 (07)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0169-5150
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- Luong, Quoc & Tauer, Loren W., 2004. "A Real Options Analysis of Coffee Planting in Vietnam," Working Papers 127152, Cornell University, Department of Applied Economics and Management.
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