Revista de Economia e Sociologia Rural
https://www.revistasober.org/article/5dd571e70e8825cc6ac8fcaa
Revista de Economia e Sociologia Rural
Original article

CONSIDERATION OF TRENDS IN THE OPTIMIZATION OF FARM SYSTEMS UNDER RISK CONDITIONS

Benedito Silva Neto, Valter Jose Stulp

Downloads: 0
Views: 688

Abstract

The goal of this study was to develop a mathematical programming model which allowed the optimization of production systems in regard to trends in the results of economic activity, with consideration to contingent variations. The formulation of this model is based on the optimization of inter-annual deviations in the historical series of the results of economic activity. Numerical simulations of this model were compared to solutions obtained from the minimization of variance and the minimization of absolute deviation models. Both models were tested with and without the use of linear regressions. The obtained results reveal that the optimized model of inter-annual deviation selected activities by the trends in their economic results, increasing the level of activities with expanding results and decreasing the levels of activities with diminishing results in their solutions. The application of linear regression to the minimization of variance and minimization of absolute deviation models has not enabled these deviations to distinguish trends in the results. In the absence of positive or negative tendencies in the historical series, the optimization model of inter-annual trends revealed a superior capacity to reduce the variance than the minimization of the absolute deviation model.

Keywords

Optimization, Production Systems, Risks

Referências

HAZELL, P. B. R. A Linear Alternative to Quadratic and Semivariance Programming for Farm Planning Under Uncertainty. American Journal ofAgricultura[ Economics, 53 (1):53-62, 1971.

KENNEDY , J. S. & FRANCISCO, E. M. On the Formulation of Risk Constraints for Linear Programming. Journal of Agricultura! Economics, 25 (2):129-144, 1974.

KROLL, Y., LEVY, H. & MARKOWITZ, H. R. Mean-Variance versus Direct Utility Maximization. The Journal ofFinance, vol. XXXIX, No. 1, p. 47-61, março de 1984.

KAYLEN, M. S., PRECKEL, P. V. & LOEHMAN, E. T. Risk Modeling via Direct Utility Maximization Using Numerical Quadrature.  Americanlournal ofAgricultura[ Economics. 69 (3): 701-706, 1987.

LAMBERT, D. K. & McCARL, B. A. Risk Modeling Using Direct Solution of Nonlinear Aproximations of the Utility Function. American Journal ofAgricultura[ Economics. vol. 67 p. 846-852, 1985.

MARKOWITZ, H. M. Portfolio Selection, Journal ofFinance vol. 7, p. 77-91, 1952.

PULLEY, L. B., , Mean-Variance versus Direct Utility Maximization: a Comment. The Journal ofFinance, vol. XL, no. 2, p. 601-602,junho de 1985.

REID, D. W. & TEW, B. V. , Mean-Variance versus Direct Utility Maximization: a Comment. The Journal ofFinance, vol. XLI, no 5, p.1177-1179, dezembro de 1986.

ROBINSON, L. & BRAKE, J. Application of Portfolio Theory to Farmer and Lender Behavior. American Journal ofAgricultura[ Economics. 61 (1): 158-164, fevereiro 1979.

STULP, V. J. Effects ofFertilizer Prices under Risk on the Production ofWheat and Soybeans in Brazil. (Tese de Doutorado) Universidade de Kentucky. Lexington. Kentucky. Estados Unidos. 1977.

5dd571e70e8825cc6ac8fcaa resr Articles
Links & Downloads

resr

Share this page
Page Sections