A STOCHASTIC MODEL OF DISASTER PAYMENTS UNDER THE 1973 FARM ACT

A stochastic computer simulation model is used to estimate disaster payments under the Agriculture and Consumer Protection Act of 1973. The model uses a random yield generator and actuarial techniques. Simulated payments under 1976 program parameters and stochastic yields are estimated at $300 million, compared with actual payments of $522 million in 1974 and $262 million in 1975. A payment greater than $522 million will probably not occur again under current conditions. The $262 million level is closer to normal expectations. The model also evaluates the impact of revisions in the payment program, as well as the effect of uncertain crop yields.


Issue Date:
1977-07
Publication Type:
Journal Article
DOI and Other Identifiers:
Record Identifier:
https://ageconsearch.umn.edu/record/147790
PURL Identifier:
http://purl.umn.edu/147790
Published in:
Agricultural Economics Research, 29, 3
Page range:
63-69
Total Pages:
8




 Record created 2017-04-01, last modified 2020-10-28

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