Land Allocation in the Presence of Estimation Risk Hayes, Dermot Lence, Sergio Hayes, Dermot Lence, Sergio
dc.contributor.department Economics 2018-02-13T08:10:31.000 2020-06-30T02:09:07Z 2020-06-30T02:09:07Z Sun Jan 01 00:00:00 UTC 1995 2013-04-01 1995-07-01
dc.description.abstract <p>Estimation risk occurs when parameters relevant for decision making are uncertain. Bayes' criterion is consistent with expected-utility maximization in the presence of estimation risk. This article examines optimal (Bayes') land allocations and land allocations obtained using the traditional plug-in approach and two alternative decision rules. Bayes' allocations are much better economically than the other allocations when there are few sample observations relative to activities. Calculation of certainty equivalent returns (CERs) with estimation risk is also discussed and illustrated. CERs are typically (and incorrectly) calculated with the plug-in approach. Plug-in CERs may be extremely misleading.</p>
dc.description.comments <p>This article is from <em>Journal of Agricultural and Resource Economics</em> 20, no. 1 (1995) 49–63.</p>
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dc.identifier archive/
dc.identifier.articleid 1008
dc.identifier.contextkey 3979188
dc.identifier.s3bucket isulib-bepress-aws-west
dc.identifier.submissionpath econ_las_pubs/7
dc.language.iso en
dc.source.bitstream archive/|||Sat Jan 15 01:31:59 UTC 2022
dc.subject.disciplines Agribusiness
dc.subject.disciplines Agricultural and Resource Economics
dc.subject.disciplines Agricultural Economics
dc.subject.disciplines Economics
dc.subject.keywords Bayes' decision criterion
dc.subject.keywords certainty equivalent
dc.subject.keywords estimation risk
dc.subject.keywords expected utility
dc.subject.keywords uncertainty
dc.subject.keywords risk
dc.title Land Allocation in the Presence of Estimation Risk
dc.type article
dc.type.genre article
dspace.entity.type Publication
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