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Technology choice under changing peanut policies
Author(s) -
Price T. Jeffrey,
Lamb Marshall C.,
Wetzstein Michael E.
Publication year - 2005
Publication title -
agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.29
H-Index - 82
eISSN - 1574-0862
pISSN - 0169-5150
DOI - 10.1111/j.1574-0862.2005.00233.x
Subject(s) - production (economics) , economics , abandonment (legal) , investment (military) , yield (engineering) , agricultural economics , derived demand , technological change , microeconomics , natural resource economics , macroeconomics , demand curve , materials science , politics , political science , law , metallurgy
The effect of marketing quotas and price supports on technology adoption are examined for peanut production in the southeastern United States using a real options model of investment with output price and yield uncertainty. The optimal choice of peanut production technology (dryland versus irrigated) in the southeast is shown to depend on price supports and how they change. The manner in which price supports change will have an effect on the choice and rates of abandonment or adoption of production technologies.