An Economic-Risk Analysis of Alternative Rotations by Stochastic Simulation and Ranking with Stochastic Dominance

Document Type : Research Paper

Authors

Abstract

In this study، stochastic simulation is applied to historical data of a hypothetical farm in Fars province to investigate economies of cultivating legume in alternative rotations. Second degree stochastic dominance (SSD) and stochastic dominance with respect to function (SDRF) were utilized for this purpose. Results showed that cereals-oilseed with onion and legume rotation is most preferred for risk neutral decision makers and cereals-oilseed with legume rotation is most preferred for risk- averse decision makers. Therefore، including a legume crop in rotation can reduce amount of nitrogen required by a subsequent crop، and increase the net present income associated with that rotation. Based on the findings، considering these crops in rotations are recommended for Fars province.

Keywords