UNCERTAIN YIELDS IN SECTORAL WELFARE ANALYSIS: AN APPLICATION TO GLOBAL WARMING

David Lambert, Bruce McCarl, Quifen He, Michael S. Kaylen, Wesley Rosenthal, Ching-Cheng Chang and W.I. Nayda

Journal of Agricultural and Applied Economics, 1995, vol. 27, issue 2, 14

Abstract: Agriculture operates in an uncertain environment. Yields, prices, and resource usage can change dramatically from year to year. However, most analyses of the agricultural sector, at least those using mathematical programming methods, assume decision making is based on average yields, ignoring yield variability. This study examines how explicit consideration of stochastic yield outcomes influence a sector analysis. We develop a model that can be used for stochastic sector analysis. We extend the risk framework developed by Hazell and others to incorporate discrete yield outcomes as well as consumption activities dependent upon yield outcomes. An empirical application addresses a comparison between sector analysis with and without considerations of the economic effects of yield variability in a global warming context.

Keywords: Environmental Economics and Policy; Risk and Uncertainty (search for similar items in EconPapers)
Date: 1995
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Citations: View citations in EconPapers (9)

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Journal Article: Uncertain Yields in Sectoral Welfare Analysis: An Application to Global Warming (1995)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:joaaec:15257

DOI: 10.22004/ag.econ.15257

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