Calibration of agricultural risk programming models using positive mathematical programming

Xuan Liu, Gerrit van Kooten and Jun Duan

Australian Journal of Agricultural and Resource Economics, 2020, vol. 64, issue 3, 795-817

Abstract: Mathematical programming models of farmers’ cropping decisions must first be calibrated before they can be used to examine agricultural producer responses to policy changes. In this paper, we compare three calibration approaches for disentangling the risk parameter from the parameters of the cost function: one assumes a logarithmic utility function, while the others employ an exponential utility function. Historical crop insurance data for southern Alberta, Canada, are used to assess the calibration performance of the three approaches, and sensitivity analysis is implemented to test whether the changes in the optimal land allocation caused by the changes in the values of the parameters are practically reasonable. Only one of the three models is of practical use for policy analysis because it can recover the true values of the parameters and the results of sensitivity analysis are reasonable.

Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://doi.org/10.1111/1467-8489.12368

Related works:
Journal Article: Calibration of agricultural risk programming models using positive mathematical programming (2020)
Working Paper: Calibration of Agricultural Risk Programming Models Using Positive Mathematical Programming (2018)
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:bla:ajarec:v:64:y:2020:i:3:p:795-817

Ordering information: This journal article can be ordered from
http://ordering.onli ... 1111/(ISSN)1467-8489

Access Statistics for this article

Australian Journal of Agricultural and Resource Economics is currently edited by John Rolfe, Lin Crase and John Tisdell

More articles in Australian Journal of Agricultural and Resource Economics from Australian Agricultural and Resource Economics Society Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().