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Modeling skewness with the linear stochastic plateau model to determine optimal nitrogen rates

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  • Christopher N. Boyer
  • B. Wade Brorsen
  • Emmanuel Tumusiime

Abstract

Accurate modeling of skewness is needed to increase the actuarial fairness of crop insurance. We test Day's conjecture that crop yield skewness becomes negative as nitrogen rates increase and determine how well a linear response stochastic plateau (LRSP) production function matches the pattern of observed skewness using four long-term nitrogen experiments. Stillwater wheat is consistent with Day's conjecture, but the skewness for Lahoma and Altus wheat yields as well as Altus cotton yields are not. The LRSP assumes normal random effects and can explain only a small part of observed skewness, so a new LRSP with skew-normal random effects is introduced, which comes closer to explaining the observed skewness and should increase the accuracy of nitrogen rate recommendations. Negative skewness reduced optimal nitrogen rates and positive skewness increased optimal nitrogen rates.

Suggested Citation

  • Christopher N. Boyer & B. Wade Brorsen & Emmanuel Tumusiime, 2015. "Modeling skewness with the linear stochastic plateau model to determine optimal nitrogen rates," Agricultural Economics, International Association of Agricultural Economists, vol. 46(1), pages 1-10, January.
  • Handle: RePEc:bla:agecon:v:46:y:2015:i:1:p:1-10
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    File URL: http://hdl.handle.net/10.1111/agec.12121
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    Cited by:

    1. 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.
    2. Harmon, Xavier & Boyer, Christopher N. & Lambert, Dayton M. & Larson, James A., 2017. "Temporal Frequency Of Soil Test Information Effects On Returns To Potassium Fertilization In Cotton Production," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 49(02), pages 251-272, May.
    3. Harmon, Xavier & Boyer, Christopher N. & Lambert, Dayton M. & Larson, James A. & Gwathmey, C. Owen, 2016. "Comparing the Value of Soil Test Information Using Deterministic and Stochastic Yield Response Plateau Functions," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 0(Number 2), May.
    4. Xiaodong Du & David A. Hennessy & Hongli Feng, 2015. "Land Resilience and Tail Dependence among Crop Yield Distributions," Center for Agricultural and Rural Development (CARD) Publications 15-wp556, Center for Agricultural and Rural Development (CARD) at Iowa State University.

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