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Continuum of Risk Analysis Methods to Assess Tillage System Sustainability at the Experimental Plot Level

Author

Listed:
  • Eihab M. Fathelrahman

    (USDA-APHIS, 2150 Centre Ave., Bldg. B, Mail Stop 2E3, Fort Collins, CO 80526, USA)

  • James C. Ascough II

    () (USDA-ARS, Agricultural Systems Research Unit, 2150 Centre Ave, Bldg. D, Suite 200, Fort Collins, CO 80526, USA)

  • Dana L. Hoag

    (Department of Agricultural and Resource Economics, B330 Clark Bldg., Colorado State University, Fort Collins, CO 80523, USA)

  • Robert W. Malone

    (USDA-ARS, National Laboratory for Agriculture and the Environment, Agroecosystems Management Research Unit, 2110 University Boulevard, Ames, IA 50011, USA)

  • Philip Heilman

    (USDA-ARS, Southwest Watershed Research Center, 2000 E. Allen Rd., Tucson, AZ 85719, USA)

  • Lori J. Wiles

    (USDA-ARS, Water Management Research Unit, 2150 Centre Ave, Bldg. D, Suite 320, Fort Collins, CO 80526, USA)

  • Ramesh S. Kanwar

    (Department of Agricultural and Biosystems Engineering, 104 Davidson Hall, Iowa State University, Ames, IA 50011, USA)

Abstract

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.

Suggested Citation

  • Eihab M. Fathelrahman & James C. Ascough II & Dana L. Hoag & Robert W. Malone & Philip Heilman & Lori J. Wiles & Ramesh S. Kanwar, 2011. "Continuum of Risk Analysis Methods to Assess Tillage System Sustainability at the Experimental Plot Level," Sustainability, MDPI, Open Access Journal, vol. 3(7), pages 1-29, July.
  • Handle: RePEc:gam:jsusta:v:3:y:2011:i:7:p:1035-1063:d:13251
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    References listed on IDEAS

    as
    1. 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, July.
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    Cited by:

    1. Angelos Liontakis & Irene Tzouramani, 2016. "Economic Sustainability of Organic Aloe Vera Farming in Greece under Risk and Uncertainty," Sustainability, MDPI, Open Access Journal, vol. 8(4), pages 1-13, April.
    2. repec:gam:jsusta:v:8:y:2016:i:4:p:338:d:67690 is not listed on IDEAS
    3. repec:eee:ecolec:v:141:y:2017:i:c:p:144-153 is not listed on IDEAS

    More about this item

    Keywords

    agriculture; tillage systems; stochastic dominance; economic budgeting; risk analysis; sustainability;

    JEL classification:

    • Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics
    • Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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