Should Farmers Follow the Recommendations of Market Advisory Services? A Hierarchical Bayesian Approach to Estimation of Expected Performance

16 Pages Posted: 6 Apr 2020

See all articles by Silvina M. Cabrini

Silvina M. Cabrini

University of Illinois at Urbana-Champaign - Department of Agricultural and Consumer Economics

Scott H. Irwin

University of Illinois at Urbana-Champaign

Darrel L. Good

University of Illinois at Urbana-Champaign - Department of Agricultural and Consumer Economics

Date Written: April 2010

Abstract

A Bayesian hierarchical approach is employed to estimate individual expected performance of agricultural market advisory services. Skeptical beliefs based on market efficiency are incorporated as prior information. For a skeptical decision maker who is willing to follow an advisory program only if it is expected to increase price received by more than 1%, one of the corn programs, most of the soybean programs, and a few wheat programs may be valuable marketing alternatives. The expectation under this model from following the single top‐ranked program are price increases of 1%, 4%, and 3% for corn, soybeans, and wheat, respectively.

Keywords: Bayesian estimation, corn, market advisory service, pricing, performance, soybeans, wheat

Suggested Citation

Cabrini, Silvina M. and Irwin, Scott and Good, Darrel L., Should Farmers Follow the Recommendations of Market Advisory Services? A Hierarchical Bayesian Approach to Estimation of Expected Performance (April 2010). American Journal of Agricultural Economics, Vol. 92, Issue 3, pp. 622-637, 2010, Available at SSRN: https://ssrn.com/abstract=3569206 or http://dx.doi.org/10.1093/ajae/aaq024

Silvina M. Cabrini (Contact Author)

University of Illinois at Urbana-Champaign - Department of Agricultural and Consumer Economics ( email )

1301 W. Gregory Drive
Urbana, IL 61801
United States

Scott Irwin

University of Illinois at Urbana-Champaign ( email )

344 Mumford Hall
1301 W. Gregory Dr.
Urbana, IL 61801
United States
217-333-6087 (Phone)

HOME PAGE: http://https://scotthirwin.com/

Darrel L. Good

University of Illinois at Urbana-Champaign - Department of Agricultural and Consumer Economics ( email )

1301 W. Gregory Drive
326 Mumford Hall, MC-710
Urbana, IL 61801
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
0
Abstract Views
32
PlumX Metrics