The effect of fertilizer on risk: a heteroscedastic production function with measurable stochastic inputs
The sources of production risk are many and diverse in nature. Estimating risk as a black box, without explicit recognition of its sources, can lead to inferior estimates of optimal inputs under risk aversion. In this paper, a method is presented for estimating production functions with measurable s...
| Autores principales: | , |
|---|---|
| Formato: | Journal Article |
| Lenguaje: | Inglés |
| Publicado: |
Wiley
1985
|
| Materias: | |
| Acceso en línea: | https://hdl.handle.net/10568/170572 |
| _version_ | 1855535125660434432 |
|---|---|
| author | Rosegrant, Mark W. Roumasset, James A. |
| author_browse | Rosegrant, Mark W. Roumasset, James A. |
| author_facet | Rosegrant, Mark W. Roumasset, James A. |
| author_sort | Rosegrant, Mark W. |
| collection | Repository of Agricultural Research Outputs (CGSpace) |
| description | The sources of production risk are many and diverse in nature. Estimating risk as a black box, without explicit recognition of its sources, can lead to inferior estimates of optimal inputs under risk aversion. In this paper, a method is presented for estimating production functions with measurable stochastic inputs and for generating the parameters of the probability distributions of yield for various environments and input levels. Based on this method, it appears that moderate risk aversion can account for a 6.7 per cent to 16.7 per cent reduction in nitrogen use (relative to the risk‐neutral solution) for selected rice producing areas of the Philippines. Estimating optimal inputs without environment specific information about the sources of risk leads to large errors. This underscores the value of collecting information about the sources of risk and of exercising caution when such information is not available. |
| format | Journal Article |
| id | CGSpace170572 |
| institution | CGIAR Consortium |
| language | Inglés |
| publishDate | 1985 |
| publishDateRange | 1985 |
| publishDateSort | 1985 |
| publisher | Wiley |
| publisherStr | Wiley |
| record_format | dspace |
| spelling | CGSpace1705722025-02-19T14:01:59Z The effect of fertilizer on risk: a heteroscedastic production function with measurable stochastic inputs Rosegrant, Mark W. Roumasset, James A. fertilizers mathematical models The sources of production risk are many and diverse in nature. Estimating risk as a black box, without explicit recognition of its sources, can lead to inferior estimates of optimal inputs under risk aversion. In this paper, a method is presented for estimating production functions with measurable stochastic inputs and for generating the parameters of the probability distributions of yield for various environments and input levels. Based on this method, it appears that moderate risk aversion can account for a 6.7 per cent to 16.7 per cent reduction in nitrogen use (relative to the risk‐neutral solution) for selected rice producing areas of the Philippines. Estimating optimal inputs without environment specific information about the sources of risk leads to large errors. This underscores the value of collecting information about the sources of risk and of exercising caution when such information is not available. 1985-08 2025-01-29T12:57:06Z 2025-01-29T12:57:06Z Journal Article https://hdl.handle.net/10568/170572 en Limited Access Wiley Rosegrant, Mark W.; Roumasset, James A. 1985. The effect of fertilizer on risk: a heteroscedastic production function with measurable stochastic inputs. American Journal of Agricultural Economics 29(2): 107-121. https://doi.org/10.1111/J.1467-8489.1985.TB00651.X |
| spellingShingle | fertilizers mathematical models Rosegrant, Mark W. Roumasset, James A. The effect of fertilizer on risk: a heteroscedastic production function with measurable stochastic inputs |
| title | The effect of fertilizer on risk: a heteroscedastic production function with measurable stochastic inputs |
| title_full | The effect of fertilizer on risk: a heteroscedastic production function with measurable stochastic inputs |
| title_fullStr | The effect of fertilizer on risk: a heteroscedastic production function with measurable stochastic inputs |
| title_full_unstemmed | The effect of fertilizer on risk: a heteroscedastic production function with measurable stochastic inputs |
| title_short | The effect of fertilizer on risk: a heteroscedastic production function with measurable stochastic inputs |
| title_sort | effect of fertilizer on risk a heteroscedastic production function with measurable stochastic inputs |
| topic | fertilizers mathematical models |
| url | https://hdl.handle.net/10568/170572 |
| work_keys_str_mv | AT rosegrantmarkw theeffectoffertilizeronriskaheteroscedasticproductionfunctionwithmeasurablestochasticinputs AT roumassetjamesa theeffectoffertilizeronriskaheteroscedasticproductionfunctionwithmeasurablestochasticinputs AT rosegrantmarkw effectoffertilizeronriskaheteroscedasticproductionfunctionwithmeasurablestochasticinputs AT roumassetjamesa effectoffertilizeronriskaheteroscedasticproductionfunctionwithmeasurablestochasticinputs |