Representing Climatic Uncertainty in Agricultural Models- An Application of State-Contingetnt Theory
Crean, Jason; Parton, Kevin; Mullen, John; Jones, Randall | June 2013
Abstract
The state-contingent approach to production uncertainty presents a more general model than the conventional stochastic production approach. Here we investigate whether the state-contingent approach offers a tractable framework for representing climatic uncertainty at a farm level. We developed a discrete stochastic programming (DSP) model of a representative wheat–sheep (mixed) farm in the Central West of NSW. More explicit recognition of climatic states, and associated state-contingent responses, led to optimal farm plans that were more profitable on average and less prone to the effects of variations in climate than comparable farm plans based on the expected value framework. The solutions from the DSP model also appeared to more closely resemble farm land use than the equivalent expected value model using the same data. We conclude that there are benefits of adopting a state-contingent view of uncertainty, giving support to its more widespread application to other problems.
Citation
Crean, Jason; Parton, Kevin; Mullen, John; Jones, Randall. 2013. Representing Climatic Uncertainty in Agricultural Models- An Application of State-Contingetnt Theory. © Wiley. http://hdl.handle.net/11540/4274.Keywords
Climate
Climate change
Climate impacts assessment
Global climate change
Rural Development
Rural Development Projects
Rural Development Research
Climatic change
Climatic influence
Climatology
Investment bank
Investment policy
Rural areas
Rural economy
Rural planning
Rural poverty
Development potential
Climatic factor
Soils and climate
Dynamic climatology
Climate change mitigation
Communication in rural development
Rural enterprise zones
Rural manpower policy
Environment impact analysis
City planning
Urban climatology
Bank investment
Capital investment
Investment banking
Venture capital
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