Responses to Risk in Weed Control Decisions Under Expected Profit Maximisation

Risk is an important characteristic of decisions about weed control in crops. In this paper it is shown that risk can affect weed control decisions even if the objective of the decision maker is to maximise expected profits: that is, even if the decision maker is "risk neutral" in the usual economic sense. This is shown for two decision frameworks: 'the optimal rate approach and the economic threshold approach. Empirical results are presented for control of ryegrass in wheat in Western Australia. It is found that, in general, risk reduces the optimal level of herbicide use under expected profit maximisation. Although individual sources of risk have a small impact on the optimal decision rules, combinations of uncertain variables can have a relatively large effect.


Issue Date:
1989
Publication Type:
Working or Discussion Paper
Record Identifier:
http://ageconsearch.umn.edu/record/232316
PURL Identifier:
http://purl.umn.edu/232316
Total Pages:
21
Series Statement:
Discussion Papers
13/89




 Record created 2017-04-01, last modified 2018-01-23

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