Real option models for simulating digester system adoption on livestock farms in Emilia-Romagna

Fabio Bartolini (), Vittorio Gallerani and Davide Viaggi

No 61112, 114th Seminar, April 15-16, 2010, Berlin, Germany from European Association of Agricultural Economists

Abstract: Innovation and new technology adoption represent two central elements for the enterprise and industry development process in agriculture. The objective of this paper is to develop a farm-household model able to simulate the impacts of uncertainty in SFP, the selling price of energy and agricultural product prices parameters on the adoption of methane digester for biogas production. The model implemented is based on a real option approach that includes investment irreversibility and stochasticity in relevant parameters. The results show the relevance of uncertainty in determining the timing of adoption and emphasise the importance of predictability as a major component of policy design.

Keywords: Agricultural and Food Policy; Farm Management; Land Economics/Use (search for similar items in EconPapers)
Pages: 19
Date: 2010-04
References: Add references at CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/61112/files/bartolini1.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:eaa114:61112

DOI: 10.22004/ag.econ.61112

Access Statistics for this paper

More papers in 114th Seminar, April 15-16, 2010, Berlin, Germany from European Association of Agricultural Economists Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().