@article{Westhoff:6601,
      recid = {6601},
      author = {Westhoff, Patrick C. and Brown, Scott and Binfield, Julian  C.R.},
      title = {WHY STOCHASTICS MATTER: ANALYZING FARM AND BIOFUEL  POLICIES},
      address = {2008},
      number = {692-2016-47507},
      series = {Plenary Paper},
      pages = {20},
      year = {2008},
      abstract = {Standard deterministic analysis of agricultural and  biofuel policies can yield incomplete or  misleading
results. Stochastic analysis is especially  important when policies have asymmetric effects and when  there
is intrinsic interest in uncommon events or the  distribution of possible outcomes.

The paper examines four  recent cases where a stochastic approach was critical to a  complete and
balanced examination of important US policy  issues. In each case, a stochastic model of the  US
agricultural and biofuel sectors was used to estimate  500 sets of possible market outcomes for the 2007-
2016  period.

Changes in support levels, a proposed  revenue-based program, possible World Trade Organization  limits
on internal support measures, and biofuel use  mandates are all found to have potential impacts that  could
have been missed by traditional deterministic  analysis. A stochastic approach could also be valuable  in
looking at EU policy questions such as possible  reductions in intervention prices and export subsidies.},
      url = {http://ageconsearch.umn.edu/record/6601},
      doi = {https://doi.org/10.22004/ag.econ.6601},
}