Optimal Grazing Pressure Under Output Price And Production Uncertainty With Alternative Functional Forms
AbstractThis study uses a Cox parametric bootstrap test to select between two specifications of the von Liebig hypothesis, a switching regression model and a non-linear mixed stochastic plateau function. The selected production function was used to determine optimal stocking density for dual-purpose winter wheat, under production and output price uncertainty. The switching regression approach was rejected in favor of the non-linear mixed stochastic plateau function. The relatively small difference in optimal stocking density between risk aversion and risk neutrality suggests that risk-aversion is much less important in explaining producer response to uncertainty than is nonlinearity in the production function.
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Bibliographic InfoPaper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2003 Annual meeting, July 27-30, Montreal, Canada with number 22020.
Date of creation: 2003
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