Estimating the Value of Sequential Updating Solutions for Intra-Year Crop Management

Results of comparing updating versus nonupdating modeling assumptions call into question the use of models based on nonupdating strategies as valid representations of actual farmer actions. If farmers are sequential updaters, the results indicate that models assuming no updating are inaccurate. The degree of this inaccuracy ranges between 4 % and 10 % of profits for the study area. Further, the results indicate that updating appears to be important for both descriptive and prescriptive studies of farmer behavior. Key words: sequential updating, dynamic models, certainty equivalence. The agricultural economics profession has a strong tradition of empirical research applied to both firm level and public policy questions (Leontief). Empirical investigations focused on economic problems of the farm firm have con-tributed greatly to the profession's earned rep-utation in this regard (Jensen). These efforts have included studies to prescribe means to improve management practices (Swanson) as well as policy-oriented analyses based on pre-dicted responses of individual producers (Quiggin). Although agricultural economists have been creative in interjecting realism into their mod-eling efforts (Heady and Chandler), the role of time and the attendant possibility for the de-cision maker to gather information as the pro-duction horizon unfolds generally have not been depicted realistically. The frequent prac-tice is to assume that all input decisions (im-plying both timing and intensity) are made at the beginning of the planning cycle, even though some of the decisions will not be implemented until well into the cycle. (See, for example