Risk and uncertainty are inescapable factors in agriculture which require careful management. Farmers face production risks from the weather, crop and livestock performance, and pests and diseases, as well as institutional, personal and business risks. This revised third edition of the popular textbook includes updated chapters on theory and methods and contains a new chapter discussing the state-contingent approach to the analysis of production and the use of copulas to better model stochastic dependency. Aiming to introduce agricultural decision making, probability and risk preference, this book is an indispensable guide for students and researchers of agriculture and agribusiness management.

Introduction to decision analysis. Probability. Revision of probalities. Utility. Procedures for decision analysis. Production under risk. Whole-farm planning under risk. Investment appraisal. Decision anlysis with preferences unknown.

Cover -- Contents -- Preface -- Acknowledgements -- Part one: Multiple criteria in agricultural decisions -- Chapter 1. Main features of the multiple criteria decision-making paradigm -- Criticism of the traditional paradigm for decision-making -- Economic versus technological decisions -- Multiple objectives and goals in agricultural economics -- Historical origins of the MCDM paradigm -- Plan of the book -- Suggestions for further reading -- Chapter 2. Some basic concepts -- Attributes, objectives and goals -- Distinction between goals and constraints -- Pareto optimality -- Trade-offs between decision-making criteria -- A first approximation of the main MCDM approaches -- Suggestions for further reading -- Part two: Multiple criteria decision-making techniques -- Chapter 3. Goal programming -- Introductory example for handling multiple criteria in a farm planning model -- The role of deviational variables in goal programming -- Lexicographic goal programming -- Sensitivity analysis ...

Microeconomic modeling has been an important tool for agricultural economists for several decades and promises to be important for ad-dressing the research problems of the 1980s as well. This volume explores the possibilities for using micromodeling to analyze how individual farm businesses react to and are affected by farm policies. Although this purpose represents only one potential use of micro-modeling, effective modeling for policy analysis necessitates a broad look from several historical, analytical, and institutional perspectives. The Micromodeling Conference held November 18-20, 1981, at Airlie House, Virginia, under the auspices of the U.S. Department of Agri-culture's Economic Research Service and the Farm Foundation reflected these concerns.

This book assesses recent developments in the analysis of agricultural policy and water resource management, and highlights the utility and theoretical rigor of quantitative methods for modeling agricultural production, market dynamics, and natural resource management. In diverse case studies of the intersection between agriculture, environmental quality and natural resource sustainability, the authors analyze economic behavior - both at aggregate as well as at individual agent-level - in order to highlight the practical implications for decision-markers dealing with environmental and agricultural policy. The volume also addresses the challenges of doing robust analysis with limited data, and discusses the appropriate empirical approaches that can be employed. The studies in this book were inspired by the work of Richard E. Howitt, Emeritus Professor of Agricultural Economics at the University of California at Davis, USA, whose career has focused on the application of robust empirical methods to address concrete policy problems.