FERTILIZATION UNDER UNCERTAINTY - AN ANALYSIS BASED ON PRODUCER YIELD EXPECTATIONS
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Optimal nitrogen fertilizer levels are computed for a sample of Texas Coastal Bend grain sorghum producers based on their assessed subjective conditional yield and price probabilities, utility measures, and cost information. Producers' mean yield expectations were substantially greater than experimental yield response and their perceptions of the effects of nitrogen on yield variability were contrary to usual characterization of nitrogen as a risk-increasing input. Optimal fertilizer levels based on expected utility maximization represent actual fertilizer use somewhat better than those based on expected profit maximization. However, both calculated levels were high relative to actual fertilizer use. 1987 American Agricultural Economics Association.