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Determining Optimal Levels of Nitrogen Fertilizer Using RandomParameter Models

Published online by Cambridge University Press:  26 January 2015

Emmanuel Tumusiime ,
Brorsen B. Wade ,
Jagadeesh Mosali ,
Jim Johnson ,
James Locke  and
Jon T. Biermacher
Brorsen B. Wade
Affiliation:
Department of Agricultural Economics at Oklahoma State University
Jon T. Biermacher
Affiliation:
Agricultural Division of The Samuel Roberts Noble Foundation, Inc.
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Abstract

The parameters of yield response functions can vary by year. Past studiesusually assume yield functions are nonstochastic or “limited” stochastic. Inthis study, we estimate rye–ryegrass yield functions in which all parametersare random. The three functional forms considered are the linear responseplateau, the quadratic, and the Spillman-Mitscherlich. Nonstochastic yieldmodels are rejected in favor of stochastic parameter models. Quadraticfunctional forms fit the data poorly. Optimal nitrogen applicationrecommendations are calculated for the linear response plateau andSpillman-Mitscherlich. The stochastic models lead to smaller recommendedlevels of nitrogen, but the economic benefits of using fully stochastic cropyield functions are small because expected profit functions are relativelyflat for the stochastic yield functions. Stochastic crop yield functionsprovide a way of incorporating production, uncertainty into inputdecisions.

Keywords

cereal rye—ryegrassMonte Carlonitrogenrandom parametersstochastic plateauQ10C12D24
Type
Research Article
Information
Journal of Agricultural and Applied Economics , Volume 43 , Issue 4 , November 2011 , pp. 541 - 552
Copyright
Copyright © Southern Agricultural Economics Association 2011

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