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Abstract

A micro-level model of farmer decision making is developed to examine the extent to which uncertainty about potential yields influences the value of site-specific technologies. The economic and environmental benefits of these technologies arise from two sources: information gathering and variable-rate nitrogen application is higher on fields with low average potential yields, high spatial variability, positively skewed potential yield distributions, responsive yield to nitrogen, and low uncertainty. Variable-rate application decreases nitrogen use by reducing the extent of overapplication. However, in the presence of uncertainty about potential yields, the incentives to overapply nitrogen irrespective of the method of application, uniform of variable rate, can reduce the economic and environmental benefits of site-specific technologies.

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