Agricultural Communications Documentation Center, Funk Library, University of Illinois Box: 107 Document Number: C10136
Notes:
search from AgEcon. http://agecon.lib.umn.edu, American Agricultural Economics Association Annual Meeting, August 2-5, 1998, Salt Lake City. 14 p., This paper considers an agricultural production model of sequential nitrogen application under risk. Because of
random shocks between successive production stages, optimal fertilization decisions depend on the magnitude of farmers' risk aversion (risk premium), and the possibility for farmers to process information (value of information). We propose a joint estimation procedure of technology and risk aversion parameters, using a structural, simulation-based econometric technique. Parameter estimates for the representative farmer's utility function allow to compute both the value of information and the risk premium for farmers. Those account together for about 30 percent of fertilizer cost for Midwest corn producers.
