Should Farmers Follow the Recommendations of Market Advisory Services? A Hierarchical Bayesian Approach to Estimation of Expected Performance

Silvina M. Cabrini, Scott Irwin and Darrel L. Good

American Journal of Agricultural Economics, 2010, vol. 92, issue 3, 622-637

Abstract: A Bayesian hierarchical approach is employed to estimate individual expected performance of agricultural market advisory services. Skeptical beliefs based on market efficiency are incorporated as prior information. For a skeptical decision maker who is willing to follow an advisory program only if it is expected to increase price received by more than 1%, one of the corn programs, most of the soybean programs, and a few wheat programs may be valuable marketing alternatives. The expectation under this model from following the single top-ranked program are price increases of 1%, 4%, and 3% for corn, soybeans, and wheat, respectively. Copyright 2010, Oxford University Press.

Date: 2010
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