@article{Irwin:265986,
      recid = {265986},
      author = {Irwin, Scott H.},
      title = {The Economic Value of Situation and Outlook Programs: A  Review of Theory and Empirical Evidence},
      address = {1994},
      number = {1947-2017-5953},
      series = {Re-Engineering Marketing Policies for Food and Agriculture  - FAMC 1994 Conference},
      pages = {11},
      year = {1994},
      abstract = {Public situation and outlook (S&O) programs have a  relatively long history. The first formal program is  generally thought to be the USDA's Outlook Conference held  on April 20, 1923. Since that time, S&O programs have  expanded considerably in scope, both at the federallevel  under the auspices of the USDA and at the state-level  within land-grant colleges of agriculture. The objectives  of public S&O programs probably have not changed a great  deal over time. In 1930, H.R. Tolley suggested a purpose  statement that, in my view, is still relevant today, "One  of the primary objectives of outlook work has been, and  probably will continue to be, to obtain and make available  to farmers information that will be helpful to them in  planning their production programs so as to obtain the  greatest returns for their efforts and resources" (p.523).  In recent years, the economic value of public S&O programs  is being increasingly questioned. I believe there are two  main reasons for the reappraisal of the value of these  programs. The first is the growth of private firms that  provide relatively low-cost market information and analysis  services of the type traditionally provided by public  programs.' The surge in private activity is related to the  rapidly declining cost of gathering, processing, and  distributing information. It is argued that public S&O  programs can be downsized because private information  providers are now available to perform the functions  historically provided by public programs (e.g., Just 1983).  • The second reason is the intellectual challenge provided  by rational expectations theory. Briefly, if producers have  rational expectations, then they make optimal use of all  available information and do not make systematic  forecasting mistakes. Hence, social welfare cannot be  increased by providing producers with "better" price and  quantity forecasts, as producers already make optimal  forecasts. In this paper, I will explore the recent  challenges to S&O programs. In the first part of the paper,  theoretical arguments regarding the economic value of S&O  programs will be discussed. Three theoretical frameworks  will be examined: (1) a cobweb model, (2) a rational  expectations model, and (3) a rational expectations model  with learning and costly information. In the second part of  the paper, the direct empirical evidence on the economic  value of S&O programs will be reviewed.},
      url = {http://ageconsearch.umn.edu/record/265986},
      doi = {https://doi.org/10.22004/ag.econ.265986},
}