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A Stochastic Model For The Optimal Replacement Of Rubber Trees

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  • Etherington, Dan M.

Abstract

Recognizing the lack of realism in optimal replacement analyses that assume constant prices and yield patterns over time, a stochastic model appropriate to rubber production is developed. Data drawn from Peninsular Malaysia are used to implement the model. The results suggest that efforts should be directed towards establishing bench mark maximum annuities as guides to more economic replanting decisions rather than emphasizing earlier replanting per se. The significance of price stabilization policies also becomes evident.

Suggested Citation

  • Etherington, Dan M., 1977. "A Stochastic Model For The Optimal Replacement Of Rubber Trees," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 21(1), pages 1-19, April.
  • Handle: RePEc:ags:ajaeau:22987
    DOI: 10.22004/ag.econ.22987
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    References listed on IDEAS

    as
    1. Richard H. Day, 1965. "Probability Distributions of Field Crop Yields," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 47(3), pages 713-741.
    2. Oscar R. Burt, 1965. "Optimal Replacement under Risk," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 47(2), pages 324-346.
    3. Anthony H. Chisholm, 1966. "Criteria for Determining the Optimum Replacement Pattern," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 48(1), pages 107-112.
    4. R. K. Perrin, 1972. "Asset Replacement Principles," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 54(1), pages 60-67.
    5. Anderson, Jock R., 1974. "Risk Efficiency in the Interpretation of Agricultural Production Research," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 42(03), pages 1-54, September.
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    Cited by:

    1. Smit, H.P., 1982. "Demand and supply of natural rubber : paper prepared for the Economic and Social Commission for Asia and the Pacific, Bangkok, November 1982," Serie Research Memoranda 0029, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
    2. Alston, Julian M. & Freebairn, John W. & Quilkey, John J., 1980. "A Model Of Supply Response In The Australian Orange Growing Industry," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 24(3), pages 1-20, December.
    3. Ejaz Qureshi, Muhammad & Ranjan, Ram & Ejaz Qureshi, Sumaira, 2010. "An empirical assessment of the value of irrigation water: the case study of Murrumbidgee catchment," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(1), pages 1-20.
    4. Min, S. & Wang, X. & Liu, M. & Huang, J., 2018. "The Asymmetric Response of Farmers to the Expected Change of Rubber Price: the Roles of Sunk Cost and Path Dependency," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277316, International Association of Agricultural Economists.
    5. Mahrizal & L. Lanier Nalley & Bruce L. Dixon & Jennie S. Popp, 2014. "An optimal phased replanting approach for cocoa trees with application to Ghana," Agricultural Economics, International Association of Agricultural Economists, vol. 45(3), pages 291-302, May.
    6. Burman, Leonard E., 1980. "A Review of Monte Carlo Applications in Agricultural Research," 1980 Annual Meeting, July 27-30, Urbana-Champaign, Illinois 278475, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    7. Etherington, Dan M. & Premachandra, W. M., 1987. "A Bouncing Ball: Long-Run Cyclical Instability in the Sri Lanka Rubber Industry," 1987 Occasional Paper Series No. 4 197320, International Association of Agricultural Economists.
    8. Min, Shi & Wang, Xiaobing & Liu, Min & Huang, Jikun, 2018. "The asymmetric response of farmers to an expected change in the price of rubber: The roles of sunk costs and path dependency," Land Use Policy, Elsevier, vol. 79(C), pages 585-594.

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