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An Operational Approach For Evaluating Investment Risk: An Application To The No-Till Transition

  • Bharat M. Upadhyay

    (Agriculture & Agri-Food Canada)

  • Douglas L. Young

    (Washington State University)

Registered author(s):

    Roy’s safety-first rule is used to provide measures popular with farmers of short and long term business risk associated with various no-till transition strategies over an investment horizon. The short run rule provided more sensitivity to inter-year financial risk than other commonly used criteria. Results revealed that speed of adoption influenced the probability of successful transition more than did the sequence of drill acquisition methods. Higher equity and larger farms had a greater chance of transition success. Slow acreage expansion with a custom or rental drill reduces risk until a no-till yield penalty is eliminated.

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    Paper provided by EconWPA in its series Others with number 0412002.

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    Length: 22 pages
    Date of creation: 29 Dec 2004
    Date of revision:
    Handle: RePEc:wpa:wuwpot:0412002
    Note: Type of Document - pdf; pages: 22. 22 pages, PDF format
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    9. Spence, Michael & Zeckhauser, Richard J, 1972. "The Effect of the Timing of Consumption Decisions and the Resolution of Lotteries on the Choice of Lotteries," Econometrica, Econometric Society, vol. 40(2), pages 401-03, March.
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