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Analysing impacts of changing price variability with estimated farm risk-programming models

Author

Listed:
  • Jansson, Torbjörn
  • Heckelei, Thomas
  • Gocht, Alexander
  • Basnet, Shyam Kumar
  • Zhang, Yinan
  • Neuenfeldt, Sebastian
Abstract
We formulate and estimate a farm level simulation model of agricultural crop production, and apply it to a scenario with increasing yield variability. The objective function is of the mean-variance utility type with a positive mathematical programming (PMP) cost function, and it is estimated using the optimality conditions and a large panel data set obtained from the FADN. Special attention is given to the problem of separating the effect of the covariance matrix from that of the quadratic PMP terms. The model is applied in a partial analysis of impacts of climate change in Germany by exogenously changing yield patterns.

Suggested Citation

  • Jansson, Torbjörn & Heckelei, Thomas & Gocht, Alexander & Basnet, Shyam Kumar & Zhang, Yinan & Neuenfeldt, Sebastian, 2014. "Analysing impacts of changing price variability with estimated farm risk-programming models," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182665, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaae14:182665
    DOI: 10.22004/ag.econ.182665
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    References listed on IDEAS

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    1. Stanley R. Thompson & Roland Herrmann & Wolfgang Gohout, 2000. "Agricultural Market Liberalization and Instability of Domestic Agricultural Markets: The Case of the CAP," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(3), pages 718-726.
    2. Christopher Gilbert & Wyn Morgan, 2010. "Has food price volatility risen?," Department of Economics Working Papers 1002, Department of Economics, University of Trento, Italia.
    3. Thomas Heckelei & Hendrik Wolff, 2003. "Estimation of constrained optimisation models for agricultural supply analysis based on generalised maximum entropy," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 30(1), pages 27-50, March.
    4. Heckelei, Thomas & Britz, Wolfgang & Zhang, Yinan, 2012. "Positive Mathematical Programming Approaches – Recent Developments in Literature and Applied Modelling," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 1(1), pages 1-16, April.
    5. Richard E. Howitt, 1995. "Positive Mathematical Programming," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(2), pages 329-342.
    6. Gocht, Alexander & Britz, Wolfgang, 2011. "EU-wide farm type supply models in CAPRI--How to consistently disaggregate sector models into farm type models," Journal of Policy Modeling, Elsevier, vol. 33(1), pages 146-167, January.
    7. Raskin, Rob & Cochran, Mark J., 1986. "Interpretations And Transformations Of Scale For The Pratt-Arrow Absolute Risk Aversion Coefficient: Implications For Generalized Stochastic Dominance," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 11(2), pages 1-7, December.
    8. Severini, Simone & Cortignani, Raffaele, 2011. "Modeling farmer participation to a revenue insurance scheme by means of Positive Mathematical Programming," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 116001, European Association of Agricultural Economists.
    9. Petsakos, Athanasios & Rozakis, Stelios, 2011. "Integrating risk and uncertainty in PMP models," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114762, European Association of Agricultural Economists.
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    Cited by:

    1. Britz, Wolfgang & Linda, Arata, "undated". "How Important Are Crop Shares In Managing Risk For Specialized Arable Farms? A Panel Estimation Of A Programming Model For Three European Regions," 56th Annual Conference, Bonn, Germany, September 28-30, 2016 244801, German Association of Agricultural Economists (GEWISOLA).
    2. Carpentier, Alain & Gohin, Alexandre & Sckokai, Paolo & Thomas, Alban, 2015. "Economic modelling of agricultural production: past advances and new challenges," Revue d'Etudes en Agriculture et Environnement, Editions NecPlus, vol. 96(01), pages 131-165, March.
    3. Kamel Elouhichi & Maria Espinosa Goded & Pavel Ciaian & Angel Perni Llorente & Bouda Vosough Ahmadi & Liesbeth Colen & Sergio Gomez Y Paloma, 2018. "The EU-Wide Individual Farm Model for Common Agricultural Policy Analysis (IFM-CAP v.1): Economic Impacts of CAP Greening," JRC Research Reports JRC108693, Joint Research Centre.

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    Keywords

    Research Methods/ Statistical Methods; Risk and Uncertainty;

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