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A household decision model that includes output price and yield uncertainty was used to estimate cotton and soybean acreage response for Alabama and Georgia. The model fit the Alabama data well, resulting in own-price elasticity estimates of 0.57 for cotton and 1.04 for soybeans. The Georgia data did not yield significant own-profit effects. For both states, statistical tests led to the conclusion that producers are not risk neutral. |
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©National Cotton Council, Memphis TN |
Document last modified Sunday, Dec 6 1998
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