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The MODERE Model and The Economic Analysis of Farmers’ Decisions

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  • Gomez Gomez, Carlos Mario
  • Gutierrez, Carlos

Abstract

The MODERE, the Ministry of the Environment Irrigation Decision Model, is a simulation tool which uses mathematical programming methods to reveal the implicit multiattribute objective function lying behind the observed cropping decision. The model takes different criteria such as profit maximization, risk aversion, avoidance of management complexities and so forth into account. In order to determine the feasible combination of attributes of this objective function the model considers the production possibility frontier explicitly as depending on market prices, policy incentives, availability of production factors, water irrigation facilities agronomic vocation and other constraints. Once calibrated the model becomes a powerful tool to assess the impact of different policy scenarios such as subsidies decoupling, water prices modifications, irrigation technique substitution and so on. The MODERE is a preference revelation model purposedly designed to be integrated in the Decision Support Platform which is used by the Spanish Ministry of the Environment to compare the policy scenarios which are relevant to assess the effectiveness and economic impact of the measures designed to reach the environmental objectives of the Water Framework Directive. The model is supported by a comprehensive data base built on purpose for its implementation covering almost all the Spanish Irrigation Districts with high spatial detail. This model is currently one of the important modules of the information and decision support systems developed by the Economic Analysis Unit of the Water Directorate at the Ministry of the Environment in Spain.

Suggested Citation

  • Gomez Gomez, Carlos Mario & Gutierrez, Carlos, 2008. "The MODERE Model and The Economic Analysis of Farmers’ Decisions," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6492, European Association of Agricultural Economists.
  • Handle: RePEc:ags:eaa107:6492
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    References listed on IDEAS

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    1. Robert J. Delforce & J. Brian Hardaker, 1985. "An Experiment In Multiattribute Utility Theory," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 29(3), pages 179-198, December.
    2. E. H. Phelps Brown, 1957. "The Meaning of the Fitted Cobb-Douglas Function," The Quarterly Journal of Economics, Oxford University Press, vol. 71(4), pages 546-560.
    3. James S. Dyer & Peter C. Fishburn & Ralph E. Steuer & Jyrki Wallenius & Stanley Zionts, 1992. "Multiple Criteria Decision Making, Multiattribute Utility Theory: The Next Ten Years," Management Science, INFORMS, vol. 38(5), pages 645-654, May.
    4. Berbel, Julio, 1989. "Analysis of Protected Cropping: An Application of Multiobjective Programming Techniques to Spanish Horticulture," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 16(2), pages 203-216.
    5. Delforce, Robert J. & Hardaker, J. Brian, 1985. "An Experiment In Multiattribute Utility Theory," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 29(03), December.
    6. Berbel, J. & Rodriguez-Ocana, A., 1998. "An MCDM approach to production analysis: An application to irrigated farms in Southern Spain," European Journal of Operational Research, Elsevier, vol. 107(1), pages 108-118, May.
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    Keywords

    Agricultural Economics; Water Economics; Simulated Models; Land Economics/Use; Political Economy; Research Methods/ Statistical Methods; Resource /Energy Economics and Policy;

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