Campus Units

Economics, Center for Agricultural and Rural Development

Document Type

Article

Publication Version

Published Version

Publication Date

2010

Journal or Book Title

Journal of Agricultural and Resource Economics

Volume

35

Issue

3

First Page or Article ID Number

368

Last Page

384

Abstract

The production literature has shown that inputs such as fertilizer can be defined as riskincreasing. However, farmers also consistently overapply nitrogen. A model of optimal input use under uncertainty is used to address this paradox. Using experimental data, a stochastic production relationship between yield and soil nitrate is estimated. Numerical results show that input uncertainty may cause farmers to overapply nitrogen. Survey data suggest that farmers are risk averse, but prefer small chances of high yields compared to small chances of crop failures when expected yields are equivalent. Furthermore, yield risk and yield variability are not equivalent.

Comments

This is an article from Journal of Agricultural and Resource Economics, 2010; 35(3);368–384. Posted with permission.

Copyright Owner

Western Agricultural Economics Association

Language

en

File Format

application/pdf