Optimizing Seed Acreage: Decision Making with Production and Utilization Uncertainties

M. Dean Ethridge, Fred C. White and D. Kannan

American Journal of Agricultural Economics, 1975, vol. 57, issue 3, 439-449

Abstract: Under yield and utilization uncertainties, optimum planted acreage may be estimated using the concept of disequilibrium costs—those costs incurred when production is not matched with utilization. A model to minimize expected disequilibrium cost is formulated and applied to peanut seed acreage in Georgia. Since larger disequilibrium costs result from underproduction than from overproduction of peanut seed, optimum seed acreage increases substantially when allowances are made for existing yield and utilization uncertainties.

Date: 1975
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Persistent link: https://EconPapers.repec.org/RePEc:oup:ajagec:v:57:y:1975:i:3:p:439-449.

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