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Valuing Forecast Characteristics in a Dynamic Agricultural Production System
Author(s) -
Mjelde James W.,
Sonka Steven T.,
Dixon Bruce L.,
Lamb Peter J.
Publication year - 1988
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1241506
Subject(s) - production (economics) , agriculture , agricultural productivity , value (mathematics) , forecast skill , econometrics , environmental science , lead time , economics , climatology , meteorology , statistics , mathematics , geography , operations management , archaeology , geology , macroeconomics
A dynamic programming model of east‐central Illinois corn production is utilized to determine the value of seasonal climate forecasts. Results indicate that the value of climate forecasts is sensitive to economic conditions as well as forecast characteristics. A trade‐off between forecast accuracy and lead time exists. A less accurate forecast received earlier in the production process may be more valuable than a more accurate forecast received later. Additional characteristics evaluated include forecast periods of greatest importance, prior knowledge assumptions, and interactions between forecasting adjacent periods.