Simulating the Adoption of Soil Conservation Management Systems Under the Conditions of Uncertainty (Erosion, Control)
Setia, Parveen Parkash
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https://hdl.handle.net/2142/69869
Description
Title
Simulating the Adoption of Soil Conservation Management Systems Under the Conditions of Uncertainty (Erosion, Control)
Author(s)
Setia, Parveen Parkash
Issue Date
1985
Department of Study
Agricultural Economics
Discipline
Agricultural Economics
Degree Granting Institution
University of Illinois at Urbana-Champaign
Degree Name
Ph.D.
Degree Level
Dissertation
Keyword(s)
Economics, Agricultural
Abstract
Soil conservation has become a key issue in the U.S. in the 1980's. There is increasing concern for the continuing problem of soil erosion. Since conservation involves a planning horizon of more than one year, risk and uncertainty enter into the plans. Over time it is difficult to predict farm income due to variability in prices, costs, interest rates, weather, crop yields, and other unpredictable factors. Any long-term planning will be incomplete if it does not take into consideration risk and uncertainty. Thus, by simulating the effect of farmers risk attitudes toward the adoption of soil conservation management systems and its impact on the farm, farm income, and soil erosion, a suitable strategy can be designed to aid farmers in adopting soil conservation practices.
A stochastic-simulation model (SSOILEC) which allowed the simultaneous consideration of uncertainty in revenues due to weather, crop yields, crop prices, and interest rates and farmers' risk attitudes was selected to apply in this study. Two decision criteria, namely the expected utility hypothesis and safety-first were selected to examine the influence of an individual's risk attitudes on the adoption of soil conservation management systems.
The findings of the study clearly indicate that conservation tillage (reduced tillage or no-till) was the most preferred method to control soil loss in the long run with or without consideration of risk. The results from the incorporation of risk showed that the ranking changes with increases in the level of risk aversion. Depending upon the soil characteristics, it appears possible that at some level of risk aversion there may be no feasible choice for an individual out of the alternative management systems. A final observation is that the results obtained by using the expected utility hypothesis and safety-first approaches are not identical.
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