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INVESTMENT IN SITE SPECIFIC CROP MANAGEMENT UNDER UNCERTAINTY

Murat Isik, Madhu Khanna and Alex Winter-Nelson

No 21684, 1999 Annual meeting, August 8-11, Nashville, TN from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: This paper examines the impact of price uncertainty on farmers' adoption decision in site specific crop management using an option value model. It shows that price uncertainty could lead farmers to delay the investment 3 to 25 years as opposed to the net present value rule. Immediate investment is only worthwhile on high soil fertility and soil quality fields with high variability.

Keywords: Crop Production/Industries; Risk and Uncertainty (search for similar items in EconPapers)
Pages: 14
Date: 1999
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea99:21684

DOI: 10.22004/ag.econ.21684

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