IDEAS home Printed from
   My bibliography  Save this paper

Risk, uncertainty and pasture investment decisions


  • Jackson, Thomas


The private decisions of farmers to invest in new technologies interest economists because these decisions influence the rate of farm productivity growth and the returns to public investment in agricultural research and development. Economic analysis of decisions to invest in new technologies on farms involves considering the effects of these decisions on the profitability and risk of the farm business. This is done routinely using whole-farm economic models and techniques such as stochastic simulation. Such analysis can be used to predict the extent to which a technology is likely to be adopted in equilibrium, when the consequences of adoption are known to all potential adopters. Until this equilibrium is reached, however, potential adopters of new technologies face uncertainty about the consequences of adoption. This alters expectations about the effects on profitability and risk of adoption, and hence alters investment decisions. The resolution of uncertainty over time through learning is therefore a key determinant of the rate at which new technologies are adopted, and hence should be represented in dynamic economic models which seek to explain these decisions.

Suggested Citation

  • Jackson, Thomas, 2011. "Risk, uncertainty and pasture investment decisions," 2011 Conference (55th), February 8-11, 2011, Melbourne, Australia 100566, Australian Agricultural and Resource Economics Society.
  • Handle: RePEc:ags:aare11:100566
    DOI: 10.22004/ag.econ.100566

    Download full text from publisher

    File URL:
    Download Restriction: no

    File URL:
    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

    1. Abadi Ghadim, Amir K. & Pannell, David J., 1999. "A conceptual framework of adoption of an agricultural innovation," Agricultural Economics, Blackwell, vol. 21(2), pages 145-154, October.
    Full references (including those not matched with items on IDEAS)

    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. Greiner, Romy & Miller, Owen & Patterson, Louisa, 2008. "The role of grazier motivations and risk attitudes in the adoption of grazing best management practices," 2008 Conference (52nd), February 5-8, 2008, Canberra, Australia 6002, Australian Agricultural and Resource Economics Society.
    2. Läpple, Doris & Renwick, Alan & Thorne, Fiona, 2015. "Measuring and understanding the drivers of agricultural innovation: Evidence from Ireland," Food Policy, Elsevier, vol. 51(C), pages 1-8.
    3. Javad Torkamani & Shahrokh Shajari, 2008. "Adoption of New Irrigation Technology Under Production Risk," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 22(2), pages 229-237, February.
    4. Luc Dossa & Barbara Rischkowsky & Regina Birner & Clemens Wollny, 2008. "Socio-economic determinants of keeping goats and sheep by rural people in southern Benin," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 25(4), pages 581-592, December.
    5. Thang, Tran Cong & Burton, Michael P. & Brennan, Donna C., 2009. "Optimal replanting and cutting rule for coffee farmers in Vietnam," 2009 Conference (53rd), February 11-13, 2009, Cairns, Australia 47638, Australian Agricultural and Resource Economics Society.
    6. Fang, Di & Richards, Timothy, 2016. "New Maize Variety Adoption in Mozambique: A Spatial Approach," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235388, Agricultural and Applied Economics Association.
    7. Pannell, David J., 2005. "Policies and politics: Challenges and opportunities for agricultural and resource economists," 2005 Conference, August 26-27, 2005, Nelson, New Zealand 98514, New Zealand Agricultural and Resource Economics Society.
    8. Bergtold, Jason S. & Duffy, Patricia A. & Hite, Diane & Raper, Randy L., 2008. "Demographic and Management Factors Affecting the Perceived Benefit of Winter Cover Crops in the Southeast," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6424, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    9. Pannell, David J., 2004. "Effectively communicating economics to policy makers," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 48(3), pages 1-21.
    10. Clarke, Hamish & Trafford, Guy & Woodford, Keith, 2014. "An evaluation of the viability of two ‘AMS’ farm systems in Central Canterbury," 2014 Conference, August 28-29, 2014, Nelson, New Zealand 187493, New Zealand Agricultural and Resource Economics Society.
    11. Gregory Amacher & Jeffrey Alwang, 2004. "Productivity and Land Enhancing Technologies in Northern Ethiopia: Health, Public Investments, and Sequential Adoption," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(2), pages 321-331.
    12. L. Toma & A. P. Barnes & L.-A. Sutherland & S. Thomson & F. Burnett & K. Mathews, 2018. "Impact of information transfer on farmers’ uptake of innovative crop technologies: a structural equation model applied to survey data," The Journal of Technology Transfer, Springer, vol. 43(4), pages 864-881, August.
    13. Ismail Moumouni & Mohamed N. Baco & Latifou Idrissou, 2019. "Towards a Re-Conceptualization of the Pathway of Agricultural Technology for a Better Impact Assessment," International Journal of Publication and Social Studies, Asian Economic and Social Society, vol. 4(2), pages 123-131, June.
    14. Chowdhury, Iftekhar Uddin Ahmed & Wang, Tong & Jin, Hailong & Smart, Alexander J., 2020. "Exploring the Determinants of Perceived Benefits of Rotational Grazing in the U. S. Great Plains," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304487, Agricultural and Applied Economics Association.
    15. Nikolaos E. Petridis & Georgios Digkas & Leonidas Anastasakis, 2020. "Factors affecting innovation and imitation of ICT in the agrifood sector," Annals of Operations Research, Springer, vol. 294(1), pages 501-514, November.
    16. Llewellyn, Rick S. & Lindner, Robert K. & Pannell, David J. & Powles, Stephen B., 2003. "Effective information and the influence of an extension event on perceptions and adoption," 2003 Conference (47th), February 12-14, 2003, Fremantle, Australia 57911, Australian Agricultural and Resource Economics Society.
    17. Ridier, Aude & Chaib, Karim & Roussy, Caroline, 2012. "The adoption of innovative cropping systems under price and production risks: a dynamic model of crop rotation choice," Working Papers 207985, Institut National de la recherche Agronomique (INRA), Departement Sciences Sociales, Agriculture et Alimentation, Espace et Environnement (SAE2).
    18. Marra, Michele & Pannell, David J. & Abadi Ghadim, Amir, 2003. "The economics of risk, uncertainty and learning in the adoption of new agricultural technologies: where are we on the learning curve?," Agricultural Systems, Elsevier, vol. 75(2-3), pages 215-234.
    19. Marshall, Graham R., 2009. "Polycentricity, reciprocity, and farmer adoption of conservation practices under community-based governance," Ecological Economics, Elsevier, vol. 68(5), pages 1507-1520, March.
    20. Lutengano Mwinuka & Khamaldin Daud Mutabazi & Frieder Graef & Stefan Sieber & Jeremia Makindara & Anthony Kimaro & Götz Uckert, 2017. "Simulated willingness of farmers to adopt fertilizer micro-dosing and rainwater harvesting technologies in semi-arid and sub-humid farming systems in Tanzania," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 9(6), pages 1237-1253, December.

    More about this item


    Farm Management;

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    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:aare11:100566. 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: . General contact details of provider: .

    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: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.