IDEAS home Printed from https://ideas.repec.org/a/ags/wjagec/32333.html
   My bibliography  Save this article

Determining Optimal Fertilization Rates Under Variable Weather Conditions

Author

Listed:
  • Talpaz, Hovav
  • Taylor, C. Robert

Abstract

This paper presents a theoretical framework for incorporating the following sources of risk into the determination of optimal fertilization rates: (a) the influence of weather and other stochastic factors on the marginal product of fertilizer, and (b) uncertainty about the coefficients of the response function. The decision criterion considered is the maximization of profit subject to a risk constraint on the probability of not recovering the cost of the fertilizer. The theoretical framework is applied to the fertilization of dryland grain sorghum in the Texas Blacklands. Results indicate that the risk averse producer should substantially lower his fertilization rate if soil moisture at fertilization time is low.

Suggested Citation

  • Talpaz, Hovav & Taylor, C. Robert, 1977. "Determining Optimal Fertilization Rates Under Variable Weather Conditions," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 2, pages 1-8, December.
    • Handle: RePEc:ags:wjagec:32333
    DOI: 10.22004/ag.econ.32333
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/32333/files/02010045.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.32333?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
    ---><---

    References listed on IDEAS

    as
    1. Lester G. Telser, 1955. "Safety First and Hedging," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 23(1), pages 1-16.
    2. Day, Richard H & Aigner, Dennis J & Smith, Kenneth R, 1971. "Safety Margins and Profit Maximization in the Theory of the Firm," Journal of Political Economy, University of Chicago Press, vol. 79(6), pages 1293-1301, Nov.-Dec..
    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. Robison, Lindon J. & King, Robert P., 1978. "Specification of Micro Risk Models for Farm Management and Policy Research," Agricultural Economic Report Series 10260, Michigan State University, Department of Agricultural, Food, and Resource Economics.

    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. Andersen, Per & Vetter, Henrik, 2015. "Pricing as a risky choice: Uncertainty and survival in a monopoly market," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 9, pages 1-22.
    2. Robison, Lindon & Lev, Larry, 1983. "Distinguishing Between Initial and Final Outcome Variables to Predict Choices Under Risk or Why Woody Chip Went to the Air," Staff Paper Series 200693, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    3. Andersen, Per & Vetter, Henrik, 2015. "Pricing as a risky choice: Uncertainty and survival in a monopoly market," Economics Discussion Papers 2015-53, Kiel Institute for the World Economy (IfW Kiel).
    4. Altomonte, Carlo & Barattieri, Alessandro & Basu, Susanto, 2015. "Average-cost pricing: Some evidence and implications," European Economic Review, Elsevier, vol. 79(C), pages 281-296.
    5. Toker Doganoglu & Christoph Hartz & Stefan Mittnik, 2007. "Portfolio optimization when risk factors are conditionally varying and heavy tailed," Computational Economics, Springer;Society for Computational Economics, vol. 29(3), pages 333-354, May.
    6. Alexander, Gordon J. & Baptista, Alexandre M. & Yan, Shu, 2014. "Bank regulation and international financial stability: A case against the 2006 Basel framework for controlling tail risk in trading books," Journal of International Money and Finance, Elsevier, vol. 43(C), pages 107-130.
    7. Maarten van Oordt, 2017. "Credit Risk Transfer and Bank Insolvency Risk," Staff Working Papers 17-59, Bank of Canada.
    8. Ortobelli, Sergio & Rachev, Svetlozar & Schwartz, Eduardo, 2000. "The Problem of Optimal Asset Allocation with Stable Distributed Returns," University of California at Los Angeles, Anderson Graduate School of Management qt3zd6q86c, Anderson Graduate School of Management, UCLA.
    9. Rahman, Shaikh Mahfuzur & Dorfman, Jeffrey H. & Turner, Steven C., 2004. "A Bayesian Approach to Optimal Cross-Hedging of Cottonseed Products Using Soybean Complex Futures," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 29(2), pages 1-16, August.
    10. Kuo-Hwa Chang & Michael Nayat Young, 2019. "Portfolios Optimizations of Behavioral Stocks with Perception Probability Weightings," Annals of Economics and Finance, Society for AEF, vol. 20(2), pages 817-845, November.
    11. Lawrence, John D. & Kaylen, Michael S., 1990. "Risk Management For Livestock Producers: Hedging And Contract Production," Staff Papers 13496, University of Minnesota, Department of Applied Economics.
    12. McSweeny, William T. & Shortle, James S., 1989. "Reducing Nutrient Application Rates For Water Quality Protection In Intensive Livestock Areas: Policy Implications Of Alternative Producer Behavior," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 18(1), pages 1-11, April.
    13. J L Ford & Zahid Muhammad, 2010. "Safety-First and Portfolio Selection: An Econometric Study for Pakistan's Banking Sector," Discussion Papers 10-18, Department of Economics, University of Birmingham.
    14. Costa, Ecio de Farias & Turner, Steven C., 2001. "Price Risk Management For Peanut Meal," Faculty Series 16656, University of Georgia, Department of Agricultural and Applied Economics.
    15. Blank, Steven C., 2001. "Globalization, Cropping Choices, and Profitability in American Agriculture," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 33(2), pages 315-326, August.
    16. Diepold, Dennis, 2011. "Zum Einfluss kurzfristiger Fremdfinanzierungsmöglichkeiten auf die Portfoliooptimierung mit illiquiden Assets," Die Unternehmung - Swiss Journal of Business Research and Practice, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 65(4), pages 380-401.
    17. Helmers, Glenn A. & Held, Larry J. & Watts, Myles J., 1982. "Estimating the Impact of Safety First Risk Constraints on Risk-Income Frontiers," 1982 Annual Meeting, August 1-4, Logan, Utah 279474, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    18. Van Vliet, Ben, 2017. "Capability satisficing in high frequency trading," Research in International Business and Finance, Elsevier, vol. 42(C), pages 509-521.
    19. Sergiy Gerasymchuk, 2007. "Mean-Variance Portfolio Selection with Reference Dependent Preferences," Working Papers 150, Department of Applied Mathematics, Università Ca' Foscari Venezia.
    20. Rosser, J. Barkley & Rosser, Marina V, 2023. "A conjoined intellectual journey: Richard H. Day and the journal he founded," Journal of Economic Behavior & Organization, Elsevier, vol. 210(C), pages 83-90.

    More about this item

    Keywords

    Crop Production/Industries;

    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:wjagec:32333. 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/waeaaea.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.