Labor Cost and Technology Adoption: Least Squares Monte Carlo Method for the Case of Sugarcane Mechanization in Florida

Nobuyuki Iwai, Robert D. Emerson and Lurleen M. Walters

No 6479, 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: The prospect of immigration reform has renewed farmers’ concerns of serious labor shortages and cost increases, which may urge highly labor-intensive specialty crop farmers to switch to less-labor-intensive technology. The large-scale mechanization of the Florida sugarcane harvest during the 1970s/80s serves as an historical example of how technologies evolved due to changes in local labor market conditions. We analyze the dynamic decision-making process of sugarcane farmers in the relevant period using net present value (NPV) approach and real options approach (ROA) with least squares Monte Carlo (LSMC).

Keywords: Crop Production/Industries; Labor and Human Capital; Research and Development/Tech Change/Emerging Technologies (search for similar items in EconPapers)
Pages: 26
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea08:6479

DOI: 10.22004/ag.econ.6479

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