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Producer'S Preference For A Cotton Farmer Owned Reserve: An Application Of Simulation And Stochastic Dominance

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  • Richardson, James W.
  • Nixon, Clair J.

Abstract

The benefits to a typical High Plains cotton farmer from a cotton farmer owned reserve were estimated using a firm-level, income tax and farm policy simulation model. Eighteen farm programs were simulated including twelve variations of a farmer owned reserve using different entry prices and trigger prices. The after-tax net present value distributions for the different farm programs were compared using stochastic dominance. The results indicate that risk averse cotton producers should prefer the 1977 farm program to either a cotton farmer owned reserve or the farm program proposed by Secretary of Agriculture Block.

Suggested Citation

  • Richardson, James W. & Nixon, Clair J., 1982. "Producer'S Preference For A Cotton Farmer Owned Reserve: An Application Of Simulation And Stochastic Dominance," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 7(01), pages 1-10, July.
    • Handle: RePEc:ags:wjagec:32421
    DOI: 10.22004/ag.econ.32421
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    References listed on IDEAS

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    1. Meyer, Jack, 1977. "Choice among distributions," Journal of Economic Theory, Elsevier, vol. 14(2), pages 326-336, April.
    2. Robert P. King & Lindon J. Robison, 1981. "An Interval Approach to Measuring Decision Maker Preferences," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 63(3), pages 510-520.
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    1. Steglin, Forrest E. & Jones, Lonnie L. & Woods, Mike D. & Stoecker, Arthur L., 1984. "Estimated Economic Impacts On The Regional Economy Of The Texas High Plains: *A Farm Program Example," 1984 Annual Meeting, August 5-8, Ithaca, New York 279052, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Mjelde, James W. & Dixon, Bruce L. & Sonka, Steven T., 1989. "Estimating The Value Of Sequential Updating Solutions For Intrayear Crop Management," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 14(01), pages 1-8, July.
    3. Richardson, James W. & Outlaw, Joe L., 2017. "The role of U.S. Safety net programs in incentivizing farm growth: a simulation approach," 21st Congress, Edinburgh, Scotland, July 2-7, 2017 345821, International Farm Management Association.
    4. Knutson, Ronald D. & Smith, Edward G. & Anderson, David P. & Richardson, James W., 1998. "Southern Farmers' Exposure to Income Risk Under the 1996 Farm Bill," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 30(1), pages 35-46, July.
    5. Richardson, James W. & Lemieux, Catharine M. & Nixon, Clair J., 1983. "Entry into Farming: The Effects of Leasing and Leverage on Firm Survival," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 15(2), pages 139-145, December.
    6. Bailey, DeeVon & Brorsen, B. Wade & Richardson, James W., 1984. "Dynamic Stochastic Simulation of Daily Cash and Futures Cotton Prices," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 16(2), pages 109-116, December.
    7. Asci, Serhat & VanSickle, John J. & Cantliffe, Daniel J., . "Risk in Investment Decision Making and Greenhouse Tomato Production Expansion in Florida," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 17(4), pages 1-26.

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