An Empirically-Grounded Comparison of the Johnson System versus the Beta as Crop Yield Distribution Models

Octavio Ramirez and Tanya U. McDonald

No 9814, 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: Previous research established that the expanded Johnson system can accommodate any theoretically possible mean-variance-skewness-kurtosis combination. Therefore, it has been hypothesized that this system can provide for a reasonably accurate modeling approximation of any probability distribution that might be encountered in practice. In order to test that hypothesis, this manuscript develops a more flexible expanded form of the Beta distribution which, in its original form, has been widely used to model and simulate crop yields for risk analysis. Empirically grounded evaluations suggest that the Johnson system can model a variety of typical yield data-generating processes that are based on the Beta distribution much more precisely than the Beta can model representative crop yield data simulated from the Johnson system. The accuracy with which the Johnson system approximates the Beta supports the previously stated hypothesis.

Keywords: Crop; Production/Industries (search for similar items in EconPapers)
Pages: 28
Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea07:9814

DOI: 10.22004/ag.econ.9814

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