Date of Award
Doctor of Philosophy
George W. Ladd
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.
Digital Repository @ Iowa State University, http://lib.dr.iastate.edu/
Steven Scott Duncan
Duncan, Steven Scott, "The relevant forecast of variance of income for marketing decisions under uncertainty " (1988). Retrospective Theses and Dissertations. 8840.