Designing an Agricultural Vegetative Waste-Management System Under Uncertain Prices of Treatment-Technology Output Products

Broitman, D., Raviv, O., Ayalon, O., & Kan, I. (2018). Designing an agricultural vegetative waste-management system under uncertain prices of treatment-technology output products. Waste management, 75, 37-43.

20 Pages Posted: 28 Jun 2021

See all articles by Dani Broitman

Dani Broitman

Technion-Israel Institute of Technology - Faculty of Architecture and Town Planning

Orna Raviv

University of Haifa

Ofira Ayalon

University of Haifa - Graduate School of Business; Samuel Neaman Institute for National Policy

Iddo Kan

Hebrew University of Jerusalem - Department of Agricultural Economics and Management

Date Written: 2018

Abstract

Setting up a sustainable agricultural vegetative waste-management system is a challenging investment task, particularly when markets for output products of waste-treatment technologies are not well established. We conducted a unique economic analysis of possible investments in treatment technologies of agricultural vegetative waste, while accounting for uncertain output prices. Under a risk-neutral approach, we found the range of output-product prices within which each considered technology becomes most profitable, using average final prices as the exclusive standard. Under a risk-averse perspective, we ranked the treatment technologies based on their computed certainty-equivalent profits as functions of the coefficient of variation of the technologies’ output prices. We found the ranking of treatment technologies based on average prices to be robust to output-price fluctuations provided that the coefficient of variation of the output prices is below about 0.4, that is, approximately twice as high as that of well-established recycled-material markets such as glass, paper and plastic.

Keywords: agricultural waste; economic model; optimization; risk neutral; risk averse

Suggested Citation

Broitman, Dani and Raviv, Orna and Ayalon, Ofira and Kan, Iddo, Designing an Agricultural Vegetative Waste-Management System Under Uncertain Prices of Treatment-Technology Output Products (2018). Broitman, D., Raviv, O., Ayalon, O., & Kan, I. (2018). Designing an agricultural vegetative waste-management system under uncertain prices of treatment-technology output products. Waste management, 75, 37-43., Available at SSRN: https://ssrn.com/abstract=3868391 or http://dx.doi.org/10.2139/ssrn.3868391

Dani Broitman (Contact Author)

Technion-Israel Institute of Technology - Faculty of Architecture and Town Planning ( email )

Technion City
Haifa 32000
Israel

Orna Raviv

University of Haifa ( email )

Mount Carmel
Haifa, 31905
Israel

Ofira Ayalon

University of Haifa - Graduate School of Business ( email )

Haifa 31905
Israel

Samuel Neaman Institute for National Policy

Israel

Iddo Kan

Hebrew University of Jerusalem - Department of Agricultural Economics and Management ( email )

P.O. Box 12
Rehovot, 76100
Israel

HOME PAGE: http://nrerc.haifa.ac.il/members/kan.htm

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