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The Application of Robust Regression to a Production Function Comparison – the Example of Swiss Corn

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  • Finger, Robert
  • Hediger, Werner

Abstract

The adequate representation of crop response functions is crucial for agricultural modeling and analysis. So far, the evaluation of such functions focused on the comparison of different functional forms. In this article, the perspective is expanded by also considering an alternative regression method. This is motivated by the fact that extreme climatic events can result in crop yield observations that cause misleading results if Least Squares regression is applied. We show that such outliers are adequately treated if and only if robust regression or robust diagnostics are applied. The example of simulated Swiss corn yields shows that the application of robust instead of Least Squares regression causes reasonable shifts in coefficient estimates and their level of significance, and results in higher levels of goodness of fit. Furthermore, the costs of misspecification decrease remarkably if optimal input recommendations are based on results of robust regression. We therefore recommend the application of the latter instead of Least Squares regression for agricultural and environmental production function estimation.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 4740.

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Date of creation: Sep 2007
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Handle: RePEc:pra:mprapa:4740

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Keywords: production function estimation; production function comparison; robust regression; crop response;

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  1. Jan-Egbert Sturm & Jakob De Haan, 2001. "How robust is the relationship between economic freedom and economic growth?," Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 33(7), pages 839-844.
  2. Godard, C. & Roger-Estrade, J. & Jayet, P.A. & Brisson, N. & Le Bas, C., 2008. "Use of available information at a European level to construct crop nitrogen response curves for the regions of the EU," Agricultural Systems, Elsevier, Elsevier, vol. 97(1-2), pages 68-82, April.
  3. Llewelyn, Richard V. & Featherstone, Allen M., 1997. "A comparison of crop production functions using simulated data for irrigated corn in western Kansas," Agricultural Systems, Elsevier, Elsevier, vol. 54(4), pages 521-538, August.
  4. Meinke, H. & Baethgen, W. E. & Carberry, P. S. & Donatelli, M. & Hammer, G. L. & Selvaraju, R. & Stockle, C. O., 2001. "Increasing profits and reducing risks in crop production using participatory systems simulation approaches," Agricultural Systems, Elsevier, Elsevier, vol. 70(2-3), pages 493-513.
  5. Rajsic, Predrag & Weersink, Alfons, 2008. "Do farmers waste fertilizer? A comparison of ex post optimal nitrogen rates and ex ante recommendations by model, site and year," Agricultural Systems, Elsevier, Elsevier, vol. 97(1-2), pages 56-67, April.
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Cited by:
  1. Rohling, Moritz & Ohndorf, Markus, 2012. "Prices vs. Quantities with fiscal cushioning," Resource and Energy Economics, Elsevier, Elsevier, vol. 34(2), pages 169-187.
  2. Di Falco, Salvatore & Veronesi, Marcella, 2012. "Managing Environmental Risk In Presence Of Climate Change: Evidence From Ethiopia," 126th Seminar, June 27-29, 2012, Capri, Italy, European Association of Agricultural Economists 126010, European Association of Agricultural Economists.
  3. Finger, Robert, 2012. "Nitrogen use and the effects of nitrogen taxation under consideration of production and price risks," Agricultural Systems, Elsevier, Elsevier, vol. 107(C), pages 13-20.
  4. Finger, Robert, 2011. "Reductions of Agricultural Nitrogen Use Under Consideration of Production and Price Risks," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland, European Association of Agricultural Economists 114356, European Association of Agricultural Economists.
  5. Dewbre, Joshua, 2010. "Improving resource allocation and incomes in Vietnamese agriculture," IFPRI discussion papers, International Food Policy Research Institute (IFPRI) 984, International Food Policy Research Institute (IFPRI).
  6. Thomas Epper & Helga Fehr-Duda & Renate Schubert, 2011. "Energy-Using Durables: The Role of Time Discounting in Investment Decisions," IED Working paper, IED Institute for Environmental Decisions, ETH Zurich 11-16, IED Institute for Environmental Decisions, ETH Zurich.
  7. Michele Baggio, 2012. "The Optimal Management of a Natural Resource with Switching Dynamics," IED Working paper, IED Institute for Environmental Decisions, ETH Zurich 12-19, IED Institute for Environmental Decisions, ETH Zurich.
  8. Finger, Robert, 2012. "Modeling the sensitivity of agricultural water use to price variability and climate change—An application to Swiss maize production," Agricultural Water Management, Elsevier, Elsevier, vol. 109(C), pages 135-143.
  9. Finger, Robert, 2012. "How strong is the “natural hedge”? The effects of crop acreage and aggregation levels," 123rd Seminar, February 23-24, 2012, Dublin, Ireland, European Association of Agricultural Economists 122538, European Association of Agricultural Economists.
  10. Finger, Robert & Schmid, Stephanie, 2007. "Modeling agricultural production risk and the adaptation to climate change," 101st Seminar, July 5-6, 2007, Berlin Germany, European Association of Agricultural Economists 9270, European Association of Agricultural Economists.
  11. Finger, Robert & Gerwig, Claude N., 2007. "The Impact of Climate Change on the Profitability of Site Specific Technologies," MPRA Paper 4792, University Library of Munich, Germany.
  12. Ines Kapphan & Pierluigi Calanca & Annelie Holzkaemper, 2011. "Climate Change, Weather Insurance Design and Hedging Effectiveness," IED Working paper, IED Institute for Environmental Decisions, ETH Zurich 11-17, IED Institute for Environmental Decisions, ETH Zurich.
  13. Julia Blasch & Mehdi Farsi, 2012. "Retail demand for voluntary carbon offsets - A choice experiment among Swiss consumers," IED Working paper, IED Institute for Environmental Decisions, ETH Zurich 12-18, IED Institute for Environmental Decisions, ETH Zurich.
  14. Di Falco, Salvatore & Veronesi, Marcella, 2012. "Managing Environmental Risk in Presence of Climate Change: The Role of Adaptation in the Nile basin of Ethiopia," 86th Annual Conference, April 16-18, 2012, Warwick University, Coventry, UK, Agricultural Economics Society 134775, Agricultural Economics Society.
  15. Markus Ohndorf, 2010. "Optimal Monitoring for project-based Emissions Trading Systems under incomplete Enforcement," IED Working paper, IED Institute for Environmental Decisions, ETH Zurich 10-13, IED Institute for Environmental Decisions, ETH Zurich.
  16. Justin Caron & Markus Ohndorf, 2010. "Irreversibility and Optimal Timing of Climate Policy," IED Working paper, IED Institute for Environmental Decisions, ETH Zurich 10-14, IED Institute for Environmental Decisions, ETH Zurich.
  17. Di Falco, Salvatore & Veronesi, Marcella, 2011. "On Adaptation To Climate Change And Risk Exposure In The Nile Basin Of Ethiopia," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland, European Association of Agricultural Economists 115549, European Association of Agricultural Economists.
  18. Thomas Bernauer & Lena Maria Schaffer, 2010. "Climate Change Governance," IED Working paper, IED Institute for Environmental Decisions, ETH Zurich 10-12, IED Institute for Environmental Decisions, ETH Zurich.
  19. Horowitz, John & Ueda, Kohei, 2013. "Paying Farmers to Reduce Nitrogen Application on Corn: The Baseline Approach," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C., Agricultural and Applied Economics Association 150561, Agricultural and Applied Economics Association.

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