EconPapers    
Economics at your fingertips  
 

The Rationality of USDA Forecasts under Multivariate Asymmetric Loss

Siddhartha Bora, Ani L. Katchova and Todd Kuethe ()

American Journal of Agricultural Economics, 2021, vol. 103, issue 3, 1006-1033

Abstract: A large number of previous studies suggest that many USDA forecasts are biased and/or inefficient. These findings, however, may be the result of the assumed loss function of USDA forecasters. We test the rationality of the USDA net cash income forecasts and the WASDE production and price forecasts between 1988 and 2018 using a flexible multivariate loss function that allows for asymmetric loss and non‐separable forecast errors. Our results provide robust evidence that USDA forecasters are rational expected loss minimizers yet demonstrate a tendency to place a greater weight on under‐ or overprediction. As a result, this study provides an alternate interpretation of previous findings of forecast irrationality.

Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://doi.org/10.1111/ajae.12142

Related works:
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:wly:ajagec:v:103:y:2021:i:3:p:1006-1033

Access Statistics for this article

More articles in American Journal of Agricultural Economics from John Wiley & Sons
Bibliographic data for series maintained by Wiley Content Delivery ().

 
Page updated 2021-09-08
Handle: RePEc:wly:ajagec:v:103:y:2021:i:3:p:1006-1033