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Probability Distributions Of Crop Prices, Yields, And Gross Revenue

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  • Tew, Bernard V.
  • Reid, Donald W.

Abstract

This study shows that the price-yield correlation is a major influence in determining the skewness of revenue. Therefore, normality for revenue may not be rejected even if the price and/or yield distributions are significantly skewed. Analysis of cotton revenue for Mississippi shows that this can be the case empirically when the correlation between price and yield is moderately negative and the relative variability of yield and price is not too high. Hence, for crops produced in their major production regions where negative correlations between prices and yields are the greatest, revenue distributions may have a greater tendency toward normal.

Suggested Citation

  • Tew, Bernard V. & Reid, Donald W., 1988. "Probability Distributions Of Crop Prices, Yields, And Gross Revenue," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 17(2), pages 1-7, October.
    • Handle: RePEc:ags:nejare:28827
    DOI: 10.22004/ag.econ.28827
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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. Steven T. Buccola, 1986. "Testing for Nonnormality in Farm Net Returns," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 68(2), pages 334-343.
    3. Dwight Grant, 1985. "Theory of the Firm with Joint Price and Output Risk and a Forward Market," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 67(3), pages 630-635.
    4. Robert N. Collender & David Zilberman, 1985. "Land Allocation under Uncertainty for Alternative Specifications of Return Distributions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 67(4), pages 779-786.
    5. Boggess, William G. & Lynne, Gary D. & Jones, James W. & Swaney, D.P., 1983. "Risk-Return Assessment Of Irrigation Decisions In Humid Regions," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 15(01), pages 1-9, July.
    6. Richard M. Klemme, 1985. "A Stochastic Dominance Comparison of Reduced Tillage Systems in Corn and Soybean Production under Risk," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 67(3), pages 550-556.
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    Cited by:

    1. Hammida, Mustapha & Eidman, Vernon R., 1991. "Livestock And Poultry Production Risk In The United States," Staff Papers 14016, University of Minnesota, Department of Applied Economics.

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