A STOCHASTIC MODEL OF DISASTER PAYMENTS UNDER THE 1973 FARM ACT

Thomas A. Miller and Ronald H. Millar

Journal of Agricultural Economics Research, 1977, vol. 29, issue 3, 8

Abstract: A stochastic computer simulation model is used to estimate disaster payments under the Agriculture and Consumer Protection Act of 1973. The model uses a random yield generator and actuarial techniques. Simulated payments under 1976 program parameters and stochastic yields are estimated at $300 million, compared with actual payments of $522 million in 1974 and $262 million in 1975. A payment greater than $522 million will probably not occur again under current conditions. The $262 million level is closer to normal expectations. The model also evaluates the impact of revisions in the payment program, as well as the effect of uncertain crop yields.

Keywords: Agricultural and Food Policy; Agricultural Finance; Public Economics; Research Methods/Statistical Methods (search for similar items in EconPapers)
Date: 1977
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uersja:147790

DOI: 10.22004/ag.econ.147790

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