IDEAS home Printed from https://ideas.repec.org/p/wpa/wuwpot/0412002.html
   My bibliography  Save this paper

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

Author

Listed:
  • Bharat M. Upadhyay

    (Agriculture & Agri-Food Canada)

  • Douglas L. Young

    (Washington State University)

Abstract

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.

Suggested Citation

  • Bharat M. Upadhyay & Douglas L. Young, 2004. "An Operational Approach For Evaluating Investment Risk: An Application To The No-Till Transition," Others 0412002, University Library of Munich, Germany.
  • Handle: RePEc:wpa:wuwpot:0412002
    Note: Type of Document - pdf; pages: 22. 22 pages, PDF format
    as

    Download full text from publisher

    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/othr/papers/0412/0412002.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Just, Richard E., 2003. "Risk research in agricultural economics: opportunities and challenges for the next twenty-five years," Agricultural Systems, Elsevier, vol. 75(2-3), pages 123-159.
    2. Ramirez, Octavio A. & Somarriba, Eduardo, 2000. "Risk And Returns Of Diversified Cropping Systems Under Nonnormal, Cross-, And Autocorrelated Commodity Price Structures," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 25(2), pages 1-16, December.
    3. Anderson, Kim B. & Mapp, Harry P., Jr., 1996. "Risk Management Programs In Extension," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 21(1), pages 1-8, July.
    4. Richard E. Just & Gordon C. Rausser, 1989. "An Assessment of the Agricultural Economics Profession," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 71(5), pages 1177-1190.
    5. Lien, Gudbrand, 2003. "Assisting whole-farm decision-making through stochastic budgeting," Agricultural Systems, Elsevier, vol. 76(2), pages 399-413, May.
    6. Selley, Roger A. & Wilson, Paul N., 1997. "Risk Research And Public Outreach: A Tale Of Two Cultures?," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 22(2), pages 1-11, December.
    7. 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 401-403, March.
    8. Held, Larry J. & Helmers, Glenn A., 1981. "Growth And Survival In Wheat Farming: The Impact Of Land Expansion And Borrowing Restraints," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 6(2), pages 1-10, December.
    9. Mossin, Jan, 1969. "A Note on Uncertainty and Preferences in a Temporal Context," American Economic Review, American Economic Association, vol. 59(1), pages 172-174, March.
    10. Debrah, Siegfried & Hall, Harry H., 1989. "Data aggregation and farm risk analysis," Agricultural Systems, Elsevier, vol. 31(3), pages 239-245.
    11. Buschena, David E. & Zilberman, David, 1994. "What Do We Know About Decision Making Under Risk And Where Do We Go From Here?," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 19(2), pages 1-14, December.
    12. Kingwell, Ross S. & Pannell, David J. & Robinson, Stephen D., 1993. "Tactical responses to seasonal conditions in whole-farm planning in Western Australia," Agricultural Economics, Blackwell, vol. 8(3), pages 211-226, March.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Investment risk; Monte Carlo simulation; no-till; rent- purchase; risk; safety-first; technology adoption; transition strategy;

    JEL classification:

    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q19 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Other

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    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:wpa:wuwpot:0412002. 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: (EconWPA). General contact details of provider: https://econwpa.ub.uni-muenchen.de .

    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 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.

    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.