DETERMINANTS OF THE VALUE OF SITE-SPECIFIC INFORMATION (SSI) IN AGRICULTURE: A UNIFYING THEORY TO ANALYZE ITS RELATIVE IMPACTS

Roderick Rejesus and Carl Nelson ()

No 21779, 2000 Annual meeting, July 30-August 2, Tampa, FL from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: This paper develops a theoretically consistent behavioral model of farmer decision-making that allows for analysis of the relative impacts of the determinants of SSI value. The model departs from previous literature by assuming that SSI reduces uncertainty, but not eliminate it. Results show that increasing the accuracy (or the "level of informativeness") of SSI, increasing initial wealth, improving management ability to reduce uncertainty in the posterior, and increasing the uncertainty in the prior, increases the value of SSI. Furthermore, mean input use is found to decrease, as SSI becomes more "informative." On the other hand, the value of SSI is found to be decreasing as relative risk aversion increases. These results have policy implications for controlling non-point source pollution from fertilizer inputs and SSI-adoption behavior.

Keywords: Farm Management; Research Methods/Statistical Methods (search for similar items in EconPapers)
Pages: 28
Date: 2000
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea00:21779

DOI: 10.22004/ag.econ.21779

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