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Readdressing the Fertilizer Problem

Author

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  • Paulson, Nicholas D.
  • Babcock, Bruce A.

Abstract

The production literature has shown that inputs such as fertilizer can be defined as risk-increasing. However, farmers also consistently overapply nitrogen. A model of optimal input use under uncertainty is used to address this paradox. Using experimental data, a stochastic production relationship between yield and soil nitrate is estimated. Numerical results show that input uncertainty may cause farmers to overapply nitrogen. Survey data suggest that farmers are risk averse, but prefer small chances of high yields compared to small chances of crop failures when expected yields are equivalent. Furthermore, yield risk and yield variability are not equivalent.

Suggested Citation

  • Paulson, Nicholas D. & Babcock, Bruce A., 2010. "Readdressing the Fertilizer Problem," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 35(3), December.
  • Handle: RePEc:ags:jlaare:97853
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    References listed on IDEAS

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    Cited by:

    1. Haneishi, Yusuke & Maruyama, Atsushi & Takagaki, Michiko & Kikuchi, Masao, 2014. "Farmers’ risk attitudes to influence the productivity and planting decision: A case of rice and maize cultivation in rural Uganda," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 9(4), December.
    2. Agarwal, Sandip Kumar, 2017. "Subjective beliefs and decision making under uncertainty in the field," ISU General Staff Papers 201701010800006248, Iowa State University, Department of Economics.
    3. Boyer, Christopher N. & Larson, James A. & Roberts, Roland K. & McClure, Angela T. & Tyler, Donald D. & Zhou, Vivian, 2013. "Stochastic Corn Yield Response Functions to Nitrogen for Corn after Corn, Corn after Cotton, and Corn after Soybeans," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 45(04), pages 669-681, November.
    4. repec:wsi:ccexxx:v:08:y:2017:i:01:n:s2010007817500014 is not listed on IDEAS
    5. English, Alicia & Tyner, Wallace E. & Sesmero, Juan P. & Owens, Phillip & Muth, David, 2012. "Environmental Impacts of Stover Removal in the Corn Belt," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124873, Agricultural and Applied Economics Association.

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