《Journal of Agricultural and》.pdfVIP

Journal of Agricultural and Applied Economics, 43,4(November 2011):541–552 2011 Southern Agricultural Economics Association Determining Optimal Levels of Nitrogen Fertilizer Using Random Parameter Models Emmanuel Tumusiime, B. Wade Brorsen, Jagadeesh Mosali, Jim Johnson, James Locke, and Jon T. Biermacher The parameters of yield response functions can vary by year. Past studies usually assume yield functions are nonstochastic or ‘‘limited’’ stochastic. In this study, we estimate rye– ryegrass yield functions in which all parameters are random. The three functional forms considered are the linear response plateau, the quadratic, and the Spillman-Mitscherlich. Nonstochastic yield models are rejected in favor of stochastic parameter models. Quadratic functional forms fit the data poorly. Optimal nitrogen application recommendations are calculated for the linear response plateau and Spillman-Mitscherlich. The stochastic models lead to smaller recommended levels of nitrogen, but the economic benefits of using fully stochastic crop yield functions are small because expected profit functions are relatively flat for the stochastic yield functions. Stochastic crop yield functions provide a way of incorporating production, uncertainty into input decisions. Key Words: cereal rye–ryegrass, Monte Carlo, nitrogen, random parameters, stochastic plateau JEL Classifications: Q10, C12, D24 Optimal nitrogen (N) fertilizer recommendations of the yield response functions. This misspecifi- are often obtained by fitting yield response func- cation can affect the accuracy of optimal N rec- tions to crop yield data (Babcock, 1992; Cerrato ommendations, and any errors can reduce the and Blackmer, 1990; Lanzer and Pa