IDEAS home Printed from https://ideas.repec.org/a/ags/ajaeau/22898.html

A Bayesian Framework For Optimal Input Allocation With An Uncertain Stochastic Production Function

Author

Listed:
  • Griffiths, William E.

Abstract

A Bayesian approach is used to provide a framework for optimal input allocation for a stochastic production function with uncertain parameters. The chosen production function is a single-input version of a function which can exhibit positive or negative marginal risk. The sensitivity of optimal input allocation to the degree of risk aversion, the marginal risk parameter, and the assumed level of uncertainty about the parameters is examined. Using an example problem it is shown that parameter uncertainty will not always lead to a lower input level when a producer is risk averse. Some problems with the production function specification are uncovered, as is the incompatibility of some expected utility and stochastic assumptions.

Suggested Citation

  • Griffiths, William E., 1986. "A Bayesian Framework For Optimal Input Allocation With An Uncertain Stochastic Production Function," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 30(2-3), pages 1-25, August.
    • Handle: RePEc:ags:ajaeau:22898
    DOI: 10.22004/ag.econ.22898
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/22898/files/30020128.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.22898?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Anderson, Jock R. & Griffiths, William E., 1981. "Production Risk And Input Use: Pastoral Zone Of Eastern Australia," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 25(2), pages 1-11, August.
    2. repec:ags:agsaem:288652 is not listed on IDEAS
    3. Anderson, Jock R. & Feder, Gershon, 2007. "Agricultural Extension," Handbook of Agricultural Economics, in: Robert Evenson & Prabhu Pingali (ed.), Handbook of Agricultural Economics, edition 1, volume 3, chapter 44, pages 2343-2378, Elsevier.
    4. Jock R. Anderson & William E. Griffiths, 1982. "Production Risk And Efficient Allocation Of Resources," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 26(3), pages 226-232, December.
    5. Just, Richard E. & Pope, Rulon D., 1978. "Stochastic specification of production functions and economic implications," Journal of Econometrics, Elsevier, vol. 7(1), pages 67-86, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. William E. Griffiths & Jock R. Anderson & K.B. Hamal, 1987. "Subjective Distributions As Econometric Response Data," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 31(2), pages 127-141, August.
    2. Wall, Charles A. & Fisher, Brian S., 1988. "Supply Response and the Theory of Production and Profit Functions," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 56(03), pages 1-22, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wall, Charles A. & Fisher, Brian S., 1988. "Supply Response and the Theory of Production and Profit Functions," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 56(03), pages 1-22, December.
    2. Svend Rasmussen, 2003. "Criteria for optimal production under uncertainty. The state‐contingent approach," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 47(4), pages 447-476, December.
    3. Abedullah & Mubaraik Ali, 2006. "Quantifying the Extent and Nature of Risk in Alternative Cropping Patterns in Claveria, Philippines," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 45(2), pages 261-280.
    4. Loehman, Edna T. & Nelson, Carl H., 1992. "Optimal Risk Management, Risk Aversion, And Production Function Properties," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 17(2), pages 1-13, December.
    5. Abedullah, & Pandey, Sushil, 2004. "Risk and Fertilizer Use in the Rainfed Rice Ecosystem of Tarlac, Philippines," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 36(1), pages 241-250, April.
    6. Antle, John, 1987. "Technology and Uncertainty: Evidence from Egypt," 1987 Occasional Paper Series No. 4 197406, International Association of Agricultural Economists.
    7. Hurd, Brian H., 1994. "Yield Response And Production Risk: An Analysis Of Integrated Pest Management In Cotton," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 19(2), pages 1-14, December.
    8. Nolan, Elizabeth & Santos, Paulo, 2012. "Insurance premiums and GM traits," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 125942, International Association of Agricultural Economists.
    9. Pope, Rulon D. & Just, Richard E., 1995. "Cost Function Estimation Under Risk," Working Papers 197825, University of Maryland, Department of Agricultural and Resource Economics.
    10. Tack, Jesse, 2013. "A Nested Test for Common Yield Distributions with Applications to U.S. Corn," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 38(01), pages 1-14, April.
    11. Müller, Marc & Sanfo, Safietou & Laube, Wolfram, 2013. "Impact of Changing Seasonal Rainfall Patterns on Rainy-Season Crop Production in the Guinea Savannah of West Africa," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 151208, Agricultural and Applied Economics Association.
    12. Samira Shayanmehr & Shida Rastegari Henneberry & Ernest Baba Ali & Mahmood Sabouhi Sabouni & Naser Shahnoushi Foroushani, 2024. "Climate change, food security, and sustainable production: a comparison between arid and semi-arid environments of Iran," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(1), pages 359-391, January.
    13. Anderson, Kim B. & Mapp, Harry P., Jr., 1996. "Risk Management Programs In Extension," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 21(01), pages 1-8, July.
    14. Serra, Teresa & Zilberman, David & Goodwin, Barry K. & Featherstone, Allen M., 2005. "Effects of Decoupling on the Average and the Variability of Output," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24601, European Association of Agricultural Economists.
    15. Praneetvatakul, Suwanna & Waibel, Hermann, 2006. "Impact Assessment of Farmer Field School Using A Multi-Period Panel Data Model," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25499, International Association of Agricultural Economists.
    16. Gatti, Nicolas & Cecil, Michael & Baylis, Kathy & Estes, Lyndon & Blekking, Jordan & Heckelei, Thomas & Vergopolan, Noemi & Evans, Tom, 2023. "Is closing the agricultural yield gap a “risky” endeavor?," Agricultural Systems, Elsevier, vol. 208(C).
    17. Serrao, Amilcar & Coelho, Luis, 2004. "Cumulative Prospect Theory: A Study Of The Farmers' Decision Behavior In The Alentejo Dryland Region Of Portugal," 2004 Annual meeting, August 1-4, Denver, CO 20245, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    18. Mackinnon, John & Reinikka, Ritva, 2000. "Lessons from Uganda on strategies to fight poverty," Policy Research Working Paper Series 2440, The World Bank.
    19. Yang, Seung-Ryong & Koo, Won W. & Wilson, William W., 1992. "Heteroskedasticity In Crop Yield Models," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 17(01), pages 1-7, July.
    20. Taylor, R. Garth & Young, Robert A., 1995. "Rural-To-Urban Water Transfers: Measuring Direct Foregone Benefits Of Irrigation Water Under Uncertain Water Supplies," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 20(2), pages 1-16, December.

    More about this item

    Keywords

    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:ajaeau:22898. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/aaresea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.