The relevant forecast of variance of income for marketing decisions under uncertainty
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The Department of Economic Science was founded in 1898 to teach economic theory as a truth of industrial life, and was very much concerned with applying economics to business and industry, particularly agriculture. Between 1910 and 1967 it showed the growing influence of other social studies, such as sociology, history, and political science. Today it encompasses the majors of Agricultural Business (preparing for agricultural finance and management), Business Economics, and Economics (for advanced studies in business or economics or for careers in financing, management, insurance, etc).
History
The Department of Economic Science was founded in 1898 under the Division of Industrial Science (later College of Liberal Arts and Sciences); it became co-directed by the Division of Agriculture in 1919. In 1910 it became the Department of Economics and Political Science. In 1913 it became the Department of Applied Economics and Social Science; in 1924 it became the Department of Economics, History, and Sociology; in 1931 it became the Department of Economics and Sociology. In 1967 it became the Department of Economics, and in 2007 it became co-directed by the Colleges of Agriculture and Life Sciences, Liberal Arts and Sciences, and Business.
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1898–present
Historical Names
- Department of Economic Science (1898–1910)
- Department of Economics and Political Science (1910-1913)
- Department of Applied Economics and Social Science (1913–1924)
- Department of Economics, History and Sociology (1924–1931)
- Department of Economics and Sociology (1931–1967)
Related Units
- College of Agricultural and Life Sciences (parent college)
- College of Liberal Arts and Sciences (parent college)
- College of Business (parent college)
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Abstract
This dissertation simulated spring and fall soybean marketing decisions with historical prices in order to investigate the economic significance of incorrectly measuring the variance of the return from a marketing alternative. Some authors have suggested that the variance of the forecasted mean price describes the distribution of prices that is relevant for within-year marketing decisions. This dissertation maintained that the variance of the momentary prices is the relevant variance for these marketing decisions. The concept of a momentary variance is important in more than just the future month but is also important in the current or decision month. Comparisons were made between the decisions made using one of two irrelevant variances and the decisions made using the momentary variance. As one measure of closeness of two decision rules, these comparisons identified the probability that using the irrelevant variance would yield the same decision as using the momentary variance. As a second measure of closeness, these comparisons identified the probability that the income received from using an irrelevant variance would be, at worst, only some small amount less than the income received from using the momentary variance.