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Performance of Risk-Income Models Outside the Original Data Set

Published online by Cambridge University Press:  05 September 2016

Joseph Atwood
Department of Agricultural Economics, Auburn University
Larry J. Held
Department of Agricultural Economics, University of Wyoming
Glenn A. Helmers
Department of Agricultural Economics, University of Nebraska
Myles J. Watts
Department of Agricultural Economics and Economics, Montana State University
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Selected risk programming solutions (i.e., profit maximization, Target-MOTAD, and MOTAD) are tested in an economic environment outside the data set from which they were developed. Specifically, solutions are derived from either a longer 10-year (1965-74) or shorter 6-year estimation period (1969-74), and then, they are tested for consistent risk-income characteristics over a later 10-year period (1975-84). Risk solutions estimated from earlier periods perform well in the later test period in spite of different economic conditions between time periods. However, favorable performance may be related to the specific example used in this analysis. Further testing for other farm situations is needed before general conclusions can be reached.

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Copyright © Southern Agricultural Economics Association 1986

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