SABIIA - Sistema Aberto e Integrado de Informação em Agricultura (Sabiia)

Langemeier, Michael R.; Nelson, Nathan; Parajuli, Prem; Perkins, Seth.

This paper determined the optimal crop rotation in South Central Kansas. The model incorporated net return, risk, and water quality. In general, water quality improved as tillage was reduced within a rotation type and by adding an alfalfa rotation. The optimal crop rotation mixes included wheat, grain sorghum, soybeans, and alfalfa.

Closing down the Farm: An Experimental Analysis of Disinvestment Timing

Palavras-chave: Water quality; Optimal crop rotation; Risk and return; Farm Management; D24; D81.

Ano: 2010

URL: http://purl.umn.edu/56407

Maart, Syster Christin; Musshoff, Oliver; Odening, Martin; Schade, Christian.

Agrarian structures are often characterized by some kind of economic inertia. It is particularly puzzling why unprofitable farms persist over time instead of being sold. In this paper we analyze the exit decision of farmers using the real options approach. The validity of the real options theory is assessed by means of laboratory experiments. Our results show that real options models are able to predict actual disinvestment decisions better than traditional investment theory. Nevertheless, the observed disinvestment reluctance was even more pronounced as predicted by theory. This finding suggests the inclusion of bounded rationality into normative disinvestment models.

Tying Odysseus to the Mast: Evidence from a Commitment Savings Product in the Philippines

Palavras-chave: Disinvestment; Real Options; Experimental Economics; Agricultural Finance; Farm Management; C91; D81; D92.

Ano: 2011

URL: http://purl.umn.edu/114375

Ashraf, Nava; Karlan, Dean S.; Yin, Wesley.

We designed a commitment savings product for a Philippine bank and implemented it using a randomized control methodology. The savings product was intended for individuals who want to commit now to restrict access to their savings, and who were sophisticated enough to engage in such a mechanism. We conducted a baseline survey on 1777 existing or former clients of a bank. One month later, we offered the commitment product to a randomly chosen subset of 710 clients; 202 (28.4 percent) accepted the offer and opened the account. In the baseline survey, we asked hypothetical time discounting questions. Women who exhibited a lower discount rate for future relative to current tradeoffs, and hence potentially have a preference for commitment, were indeed...

Excluded Losses and the Demand for Insurance (PowerPoint)

Palavras-chave: Savings; Commitment; Hyperbolic preferences; Microfinance; Development economics; Program evaluation; Field experiment; Self-control; Financial Economics; C93; D01; D11; D12; D14; D81; D91; G11; O12.

Ano: 2005

URL: http://purl.umn.edu/28411

Meyer, Donald J.; Meyer, Jack.

EXCEL COOPERATIVE: STRATEGIC RESPONSE TO THE BOOM IN BIOFUELS. TEACHING NOTE

Palavras-chave: Risk; Insurance; Decision-making; Risk and Uncertainty; D81.

Ano: 2009

URL: http://purl.umn.edu/48907

Roucan-Kane, Maud; Boehlje, Michael; Gray, Allan W.; Akridge, Jay T..

The objective of this paper is to present the teaching note of a case study. The case study outlines the strategic issues facing Excel Cooperative as a result of the rapid expansion of biofuel production capacity in the Midwestern U.S. Excel Cooperative is a mid-sized, ‘local’, farmer-owned cooperative serving farmers in north central Indiana. Excel is composed of four divisions: agronomy, energy, grain, and feed/livestock. With the Excel case, the reader must think strategically about the broad impacts of the biofuel “boom”, apply strategic management tools and decision-making under uncertainty concepts to better understand the impacts, and frame a response. The methodology proposed in the teaching note is composed of a SWOT analysis, scorecarding and...

Optimal Coverage Level Choice with Individual and Area Plans of Insurance

Palavras-chave: Uncertainty; Risk; Heat mapping; Scorecarding; Scenario analysis; Payoff matrix; Decision tree; Real option; Traps; Agribusiness; D81.

Ano: 2009

URL: http://purl.umn.edu/53584

Bulut, Harun; Collins, Keith J.; Zacharias, Thomas P..

We theoretically examine a farmer’s coverage demand with area and individual insurance plans as either separate or integrated options. The individual and area losses are assumed to be imperfectly and positively correlated. With actuarially fair rates, the farmer will fully insure with the individual plan and demand no area insurance regardless of the plans being separate or integrated. Under separate plans, free area insurance and the fair rate for individual insurance, area insurance replaces a portion of individual insurance demand. Under integrated plans, free area insurance, and the fair rate for individual insurance, the farmer over-insures using both area and individual plans.

Risk Ranking: Investigating Expert and Public Differences in Evaluating Food Safety Risks

Palavras-chave: Agricultural risk; Area plans of insurance; Crop insurance; Agribusiness; Agricultural and Food Policy; Agricultural Finance; Crop Production/Industries; Demand and Price Analysis; Farm Management; Research Methods/ Statistical Methods; Risk and Uncertainty; D81; G22; Q12; Q18.

Ano: 2011

URL: http://purl.umn.edu/98803

Webster, Kevin D.; Jardine, Cindy G.; McMullen, Lynn; Cash, Sean B..

The allocation of resources with respect to food safety issues requires that decision-makers prioritize these issues, which may conflict with the public’s opinions on these matters. These differences between the experts’ perception of risk and that of the public were examined. A modified Carnegie Mellon risk ranking model was used to rank six food safety issues. The six food safety issues used in the discussions were: Bovine Spongiform Encephalopathy (BSE), Escherichia coli O157:H7, Salmonella, botulism, Paralytic Shellfish Poisoning (PSP), and acrylamide. Focus groups were conducted using public (n=29) and expert (n=21) participants, and a public survey was commissioned to further explore the focus group results. Key themes were identified from the focus...

Tipo: Report

Palavras-chave: Risk ranking; Food safety; Experts; Public; Agribusiness; Agricultural and Food Policy; Consumer/Household Economics; Food Consumption/Nutrition/Food Safety; D81; Q18; I18.

Ano: 2008

URL: http://purl.umn.edu/45495

Recap of the 2008 Crop Insurance Year: What Can We Learn from Models? (PowerPoint)

Vergara, Oscar; Zuba, Gerhard; Seaquist, Jack.

Evaluation of Risk Management Methods for Satsuma Mandarin

Palavras-chave: Crop insurance; Models; Decision-making; Risk and Uncertainty; D81.

Ano: 2009

URL: http://purl.umn.edu/48910

Lindsey, Jeanne K.; Duffy, Patricia A.; Nelson, Robert G.; Ebel, Robert C.; Dozier, William A..

Simulation of production budgets were used to compare net discounted returns and the distribution of returns under alternative risk-mitigation scenarios. Results indicate that the combination of freeze protection and crop insurance increases expected net discounted 20-year returns while decreasing the downside risk. Break-even prices ranged from $.257 to $.289 per pound. Crop insurance returns were constant across price.

Enhancing Farm Profitability through Portfolio Analysis: The Case of Spatial Rice Variety Selection.

Palavras-chave: Satsuma oranges; Freeze protection; Crop insurance; Production budget; Simulation; Crop Production/Industries; Farm Management; Risk and Uncertainty; C63; D81; Q12.

Ano: 2009

URL: http://purl.umn.edu/46754

Nalley, Lawton Lanier; Barkley, Andrew P.; Brad, Watkins; Hignight, Jeffrey A..

The objectives of this paper is to use the large depth of existing literature on portfolio theory and apply it to rice varietal selection for 6 counties in the Arkansas Delta. Results based on 1999-2006 data suggests that combining available varieties using portfolio theory could have increased profits from 3 to 26% (dependent on location) in the Arkansas Delta. The major implication of this research is that data and statistical tools are available to improve the choice of rice varieties to plant each year in specific locations within Arkansas. Specifically, there are large potential gains from combining varieties that are characterized by inverse yield responses to growing conditions such as drought, pest infestation, or the presence of a specific disease.

Paying for Safety: Preferences for Mortality Risk Reductions on Alpine Roads

Palavras-chave: Rice; Portfolio analysis; Optimal variety selection; Risk analysis.; Production Economics; D81; Q16; Q12.

Ano: 2008

URL: http://purl.umn.edu/45648

Rheinberger, Christoph M..

This paper presents a choice experiment, which values reductions in mortality risk on Alpine roads. These roads are on one hand threatened by common road hazards, on the other hand they are also endangered by natural hazards such as avalanches and rockfalls. Drawing on choice data from frequently exposed and barely exposed respondents, we are not only able to estimate the VSL but to explore how the respondents differ in their individual willingness-to-pay depending on personal characteristics. To address heterogeneity in preferences for risk reduction, we use a non-linear conditional logit model with interaction effects. The best estimate of the VSL in the context of fatal accidents on Alpine roads is in the range of €4.9–5.4 million with distinct...

TOOLS AND ANALYTICAL FRAMEWORK TO MAKE DECISIONS IN TURBULENT TIMES

Palavras-chave: Value of Statistical Life; Choice Experiment; Natural Hazard Mitigation; Traffic Safety; Health Economics and Policy; D81; J17; R42.

Ano: 2009

URL: http://purl.umn.edu/54350

Roucan-Kane, Maud; Boehlje, Michael; Gray, Allan W.; Akridge, Jay T..

The dramatic changes occurring throughout the agriculture industry are creating an increasingly turbulent business climate for the sector. The objective of this paper is to present a methodology to understand, assess, evaluate, and manage uncertainty. Five methods are discussed: scenario analysis, scorecarding and heat mapping, payoff matrix, decision tree, and options portfolio mapping. Scenario analysis can help identify the alternative futures that may unfold. Scorecarding and heat mapping assessment tools can be used to assess and map the uncertainties, and decide which uncertainties the company should capitalize on and which projects could be pursued to exploit those uncertainties. Payoff matrices and decision trees (using real option valuation)...

Firefights and Fuel Management: A Nested Rotation Model for Wildfire Risk Mitigation

Palavras-chave: Uncertainty; Risk; Heat mapping; Scorecarding; Scenario analysis; Payoff matrix; Decision tree; Real option; Traps; Agribusiness; D81.

Ano: 2009

URL: http://purl.umn.edu/55465

Lankoande, Mariam D.; Yoder, Jonathan K..

Scientists and policymakers are increasingly aware that wildfire management efforts should be broadened beyond the century-long emphasis on suppression to include more effective efforts at fuel management. Because wildfire risks change over time as vegetation matures, fuel management can be viewed as a timing problem, much like timber harvest itself. We develop a nested rotation model to examine the fuel treatment timing issue in the context of a forest environment with both timber value and non-timber values-at-risk. Simulations are performed for a ponderosa pine forest and discussed with a focus on three important aspects of wildfire management: 1) the economic tradeoffs between fuel treatments, suppression, and timber harvest 2) the effects of public...

Ambiguous Aggregation of Expert Opinions: The Case of Optimal R&D Investment

Palavras-chave: Wildfire; Fuels management; Fire suppression; Optimal rotation; Wildfire economics.; Resource /Energy Economics and Policy; Q23; D81.

Ano: 2005

URL: http://purl.umn.edu/12959

Athanassoglou, Stergios; Bosetti, Valentina; Maere d'Aertrycke, Gauthier de.

How should a decision-maker allocate R&D funds when a group of experts provides divergent estimates on a technology's potential effectiveness? To address this question, we propose a simple decision-theoretic framework that takes into account ambiguity over the aggregation of expert opinion and a decision-maker's attitude towards it. In line with the paper's focus on R&D investment, decision variables in our model may affect experts' subjective probability distributions of the future potential of a technology. Using results from convex optimization, we are able to establish a number of analytical results including a closed-form expression of our model's value function, as well as a thorough investigation of its differentiability properties. We apply...

Tipo: Working Paper

Palavras-chave: Ambiguity; Expert Opinions; R&D; Convex/Conic Optimization; Aggregation; Research and Development/Tech Change/Emerging Technologies; C61; D81; Q42.

Ano: 2012

URL: http://purl.umn.edu/121719

Tipping Points and Ambiguity in the Economics of Climate Change

Lemoine, Derek M.; Traeger, Christian P..

Replaced with revised version of paper Feb 13, 2012 available at http://purl.umn.edu/120349

Tipo: Report

Palavras-chave: Threshold; Climate; Integrated assessment; Regime shift; Ambiguity; Uncertainty; Dynamic programming; Social cost of carbon; Tipping point; Carbon tax; Environmental Economics and Policy; Risk and Uncertainty; Q54; D90; D81.

Ano: 2010

URL: http://purl.umn.edu/98127

INNOVATION IN THE FOOD AGRICULTURAL INDUSTRIES: ACOMPLEX ADAPTIVE SYSTEM

Boehlje, Michael; Broring, Stefanie; Roucan-Kane, Maud.

Innovation is critical to the long-term success of a firm as well as the economic health of an industry and the overall economy. This manuscript presents an overview of the management literature regarding technology and innovation management. It also describes the unique characteristics of the food and agricultural sector and offers a research agenda to extend the management literature to the agribusiness sector.

Optimal Conservation Policy under Imperfect Intergenerational Altruism

Palavras-chave: Innovation; Agribusiness; Portfolio of options; Risk; Agribusiness; International Development; Research and Development/Tech Change/Emerging Technologies; L24; D81; O31; O32.

Ano: 2009

URL: http://purl.umn.edu/56389

Di Corato, Luca.

In this paper we study the optimal forest conservation policy by a hyperbolically discounting society. Society comprises a series of non-overlapping imperfectly altruistic generations each represented by its own government. Under uncertainty about future pay-offs we determine, as solution of an intergenerational dynamic game, the optimal timing of irreversible harvest. Earlier harvest occurs and the option value attached to the forest clearing decision is eroded under both the assumptions of naïve and sophisticated belief about future time-preferences. This results in a bias toward the current generation gratification which affects the intergenerational allocation of benefits and costs from harvesting and conserving a natural forest.

Risk Management Education: An Examination of Crop Producers' Participation in Recent Programs and of Their Desire for Additional Training

Palavras-chave: Imperfect altruism; Real Options; Hyperbolic Discounting; Time Inconsistency; Natural Resources Management; Resource /Energy Economics and Policy; D81; C70; Q23; Q58.

Ano: 2011

URL: http://purl.umn.edu/114440

Knight, Thomas O.; Coble, Keith H.; Patrick, George F.; Baquet, Alan E..

Risk management education has been a focus of U.S. farm policy since 1996. In support of significant ongoing United States Department of Agriculture (USDA) educational efforts, this study examines agricultural producers’ educational needs and interests. Data obtained through a survey of crop producers are used in probit models examining interest in additional training in five areas including forward contracting, futures and options, crop yield insurance, crop revenue insurance, and financial management. The study results should be useful in determining appropriate risk management education program content and in indentifying and tailoring to specific target audiences.

Tipo: Journal Article

Palavras-chave: Commodity futures; Commodity options; Crop insurance; Forward contracting; Risk management; D81; D83; Q16.

Ano: 2003

URL: http://purl.umn.edu/43164

Multi-criteria analysis for the impact assessment of food safety policies: The case of EU regulation on dietary arsenic

Ragona, Maddalena; Mazzocchi, Mario; Alldrick, A.J..

Developments in knowledge concerning the toxicology and occurrence of dietary arsenic suggest that levels of exposure in some groups of the population within the EU are a cause for concern. This applies also in the case of individual Member States where local regulatory limits exist. The situation is such that some foods on the market are already the subject of consumer advice provided by government agencies. In the light of these considerations, some have suggested that Member States’ legislation concerning arsenic in foods should be modified and harmonised to reflect such developments. An evaluation of alternative policy initiatives is considered in this work. It employed a computer-based, fuzzy multi-criteria impact assessment tool for the...

Tipo: Presentation

Palavras-chave: Multi-criteria analysis; Fuzzy; Regulatory impact assessment; Food safety regulations; Arsenic; Food Consumption/Nutrition/Food Safety; C02; C65; D81; Q18.

Ano: 2012

URL: http://purl.umn.edu/124122

Tipping points and ambiguity in the economics of climate change