Information Value And Risk Premium In Agricultural Production Under Risk: The Case Of Split Nitrogen Application For Corn
AbstractThis paper considers an agricultural production model of sequential nitrogen application under risk. Because of random shocks between successive production stages, optimal fertilization decisions depend on the magnitude of farmers' risk aversion (risk premium), and the possibility for farmers to process information (value of information). We propose a joint estimation procedure of technology and risk aversion parameters, using a structural, simulation-based econometric technique. Parameter estimates for the representative farmer's utility function allow to compute both the value of information and the risk premium for farmers. Those account together for about 30 percent of fertilizer cost for Midwest corn producers.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 1998 Annual meeting, August 2-5, Salt Lake City, UT with number 20844.
Date of creation: 1998
Date of revision:
Contact details of provider:
Postal: 555 East Wells Street, Suite 1100, Milwaukee, Wisconsin 53202
Phone: (414) 918-3190
Fax: (414) 276-3349
Web page: http://www.aaea.org
More information through EDIRC
Research Methods/ Statistical Methods; Risk and Uncertainty;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Lambert, David K., 1990. "Risk Considerations In The Reduction Of Nitrogen Fertilizer Use In Agricultural Production," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 15(02), December.
- Chavas, Jean-Paul & Holt, Matthew T, 1996. "Economic Behavior under Uncertainty: A Joint Analysis of Risk Preferences and Technology," The Review of Economics and Statistics, MIT Press, vol. 78(2), pages 329-35, May.
- Feinerman, Eli & Choi, E. Kwan & Johnson, Stanley R., 1990. "Uncertainty and Split Nitrogen Application in Corn Production," Staff General Research Papers 10598, Iowa State University, Department of Economics.
- Feinerman, Eli & Kwan, E. & Johnson, Stanley R., 1990. "Uncertainty and Split Nitrogen Application in Corn Production," Staff General Research Papers 328, Iowa State University, Department of Economics.
- Baptiste Lelyon & Vincent Chatellier & Karine Daniel, 2011. "Decoupling and prices: determinant of dairy farmers’ choices?," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement, INRA Department of Economics, vol. 92(1), pages 47-68.
- Garcia, Philip & Nelson, Carl H., 2003. "Engaging Students In Research: The Use Of Structured Professional Dialogue," 2003 Annual meeting, July 27-30, Montreal, Canada 21894, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Vercammen, James & Gulati, Sumeet & Anda, Mario, 2004. "Government Taxation Schemes to Reduce Fertilizer Runoff," NAREA-CAES Conference, June 20-23, 2004, Halifax, Nova Scotia 34195, Canadian Agricultural Economics Society & Northeastern Agricultural and Resource Economics Association.
- Bontems, Philippe & Thomas, Alban, 2001. "Optimal Regulation Under Asymmetric Information And Risk Aversion With An Application To Pollution Control," 2001 Annual meeting, August 5-8, Chicago, IL 20727, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Tronstad, Russell & Silvertooth, Jeffrey C. & Husman, Steve, 2001. "Optimal Production Inputs With Varying Quality And Yield Components: Irrigation Termination Of Upland," 2001 Annual Meeting, July 8-11, 2001, Logan, Utah 36088, Western Agricultural Economics Association.
- EECKHOUDT Louis & THOMAS Alban & TREICH Nicolas, 2006. "Correlated Risks and the Value of Information for Agricultural Producers," LERNA Working Papers 06.12.205, LERNA, University of Toulouse.
- Isik, Murat & Khanna, Madhu, 2002. "Stochastic Technology, Risk Preferences And Adoption Of Site-Specific Technologies," 2002 Annual meeting, July 28-31, Long Beach, CA 19858, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Bontemps, Christophe & Couture, Stephane & Favard, Pascal, 2001.
"Is The Irrigation Water Demand Really Convex?,"
2001 Annual meeting, August 5-8, Chicago, IL
20508, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Gomez-Limon, Jose Antonio & Riesgo, Laura & Arriaza Balmon, Manuel, 2002. "Agricultural Risk Aversion Revisited: A Multicriteria Decision-Making Approach," 2002 International Congress, August 28-31, 2002, Zaragoza, Spain 24827, European Association of Agricultural Economists.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search).
If references are entirely missing, you can add them using this form.