Continuum of Risk Analysis Methods to Assess Tillage System Sustainability at the Experimental Plot Level
This study applied a broad continuum of risk analysis methods including mean-variance and coefficient of variation (CV) statistical criteria, second-degree stochastic dominance (SSD), stochastic dominance with respect to a function (SDRF), and stochastic efficiency with respect to a function (SERF) for comparing income-risk efficiency sustainability of conventional and reduced tillage systems. Fourteen years (1990–2003) of economic budget data derived from 35 treatments on 36 experimental plots under corn ( Zea mays L.) and soybean ( Glycine max L.) at the Iowa State University Northeast Research Station near Nashua, IA, USA were used. In addition to the other analyses, a visually-based Stoplight or “probability of target value” procedure was employed for displaying gross margin and net return probability distribution information. Mean-variance and CV analysis of the economic measures alone provided somewhat contradictive and inconclusive sustainability rankings, i.e ., corn/soybean gross margin and net return showed that different tillage system alternatives were the highest ranked depending on the criterion and type of crop. Stochastic dominance analysis results were similar for SSD and SDRF in that both the conventional and reduced tillage system alternatives were highly ranked depending on the type of crop and tillage system. For the SERF analysis, results were dependent on the type of crop and level of risk aversion. The conventional tillage system was preferred for both corn and soybean for the Stoplight analysis. The results of this study are unique in that they highlight the potential of both traditional stochastic dominance and SERF methods for distinguishing economically sustainable choices between different tillage systems across a range of risk aversion. This study also indicates that the SERF risk analysis method appears to be a useful and easily understood tool to assist farm managers, experimental researchers, and potentially policy makers and advisers on problems involving agricultural risk and sustainability.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Grove, Bennie & Oosthuizen, Lukas Klopper, 2010. "Stochastic efficiency analysis of deficit irrigation with standard risk aversion," Agricultural Water Management, Elsevier, vol. 97(6), pages 792-800, June.
- Lien, Gudbrand & Brian Hardaker, J. & Flaten, Ola, 2007. "Risk and economic sustainability of crop farming systems," Agricultural Systems, Elsevier, vol. 94(2), pages 541-552, May.
- Richardson, James W. & Klose, Steven L. & Gray, Allan W., 2000. "An Applied Procedure For Estimating And Simulating Multivariate Empirical (Mve) Probability Distributions In Farm-Level Risk Assessment And Policy Analysis," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 32(02), August.
- Hardaker, J. Brian & Richardson, James W. & Lien, Gudbrand D. & Schumann, Keith D., 2004.
"Stochastic efficiency analysis with risk aversion bounds: a simplified approach,"
Australian Journal of Agricultural and Resource Economics,
Australian Agricultural and Resource Economics Society, vol. 48(2), June.
- J. Brian Hardaker & James W. Richardson & Gudbrand Lien & Keith D. Schumann, 2004. "Stochastic efficiency analysis with risk aversion bounds: a simplified approach," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 48(2), pages 253-270, 06.
- Dustin L. Pendell & Jeffery R. Williams & Scott B. Boyles & Charles W. Rice & Richard G. Nelson, 2007. "Soil Carbon Sequestration Strategies with Alternative Tillage and Nitrogen Sources under Risk," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 29(2), pages 247-268.
- Babcock, Bruce A. & Choi, E. Kwan & Feinerman, Eli, 1993.
"Risk And Probability Premiums For Cara Utility Functions,"
Journal of Agricultural and Resource Economics,
Western Agricultural Economics Association, vol. 18(01), July.
- Babcock, Bruce A. & Choi, E. Kwan & Feinerman, Eli, 1993. "Risk and Probability Premiums for Cara Utility Function," Staff General Research Papers Archive 596, Iowa State University, Department of Economics.
- Grove, Bennie & Nel, F. & Maluleke, H.H., 2006. "Stochastic efficiency analysis of alternative water conservation strategies," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 45(1), March.
- Emmanuel K. Yiridoe & Alfons Weersink & David C. Hooker & Tony J. Vyn & Clarence Swanton, 2000.
"Income Risk Analysis of Alternative Tillage Systems for Corn and Soybean Production on Clay Soils,"
Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie,
Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 48(2), pages 161-174, 07.
- Y. Yiridoe & A. Weersink & T. Vyn & C. Swanton & D. Hooker, 1999. "Income Risk Analysis of Alternative Tillage Systems for Corn and Soybean Production on Clay Soils," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 47(4), pages 471-471, December.
- Meyer, Jack, 1977. "Choice among distributions," Journal of Economic Theory, Elsevier, vol. 14(2), pages 326-336, April.
- Alfons Weersink & Michael Walker & Clarence Swanton & Jim Shaw, 1992. "Economic Comparison of Alternative Tillage Systems under Risk," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 40(2), pages 199-217, 07.
When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:3:y:2011:i:7:p:1035-1063:d:13251. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (XML Conversion Team)
If references are entirely missing, you can add them using this form.