GENERALIZED HEDGE RATIO ESTIMATION WITH AN UNKNOWN MODEL

Myers and Thompson (1989) pioneered the concept of a generalized approach to estimating hedge ratios, pointing out that the model specification could have a large impact on the hedge ratio estimated. While a huge empirical literature exists on estimating hedge ratios, the literature is lacking a formal treatment of model specification uncertainty. This research accomplishes that task by taking a Bayesian approach to hedge ratio estimation, where specification uncertainty is explicitly modeled. Specifically, we present a Bayesian approach to hedge ratio estimation that integrates over model specification uncertainty, yielding an optimal hedge ratio estimator that is robust to possible model specification because it is an average across a set of hedge ratios conditional on di erent models. Model specifications vary by exogenous variables (such as exports, stocks, and interest rates) and lag lengths included. The methodology is applied to data on corn and soybeans and results show the potential benefits and insights gained from such an approach.Marketing,

ANALYSIS OF SOIL FERTILITY TESTING PROCEDURES USING UNIFORM, TOPOGRAPHICAL AND OTHER SITE-SPECIFIC METHODS

This study summarizes an analysis of uniform, topographical and other site-specific soil fertility testing procedures based on observations of various crops at various locations in North Dakota and one location in Minnesota for 2001 through 2004. Results showed little difference in economic returns among the soil fertility testing methods by crop or location.fertility, topography, soil testing, site-specific, North Dakota, Land Economics/Use,

Results of the North Dakota Land Valuation Model for the 2010 Agricultural Real Estate Assessment

This report summarizes the 2010 results of the North Dakota Land Valuation Model. The model is used annually to estimate average land values by county, based on the value of production from cropland and non-cropland. The county land values developed from this procedure form the basis for the 2010 valuation of agricultural land for real estate tax assessment. The average all agricultural land value from this analysis is multiplied by the total acres of agricultural land on the county abstract to determine each county’s total agricultural land value for taxation purposes. The State Board of Equalization compares this value with the total value assessed to agricultural property in each county. Each county is required by state statute to assess a total value of agricultural property within 5 percent of this value. The average value per acre of all agricultural land in North Dakota increased by 10.6 percent from 2009 to 2010 based on the value of production. The value cropland increased by 11.5 percent and non-cropland value increased by 1.7 percent. The formula capitalization rate was below the minimum set by the State Legislature, therefore the minimum rate of 7.7 percent was used. The majority of the increase in values for cropland and all agricultural land was due to the increased value of crop production. This increase in value of production was due primarily to market price increases that occurred in 2007 and 2008. The change in crop revenue impacted land values from a negative 1.6 percent to an increase of 21.8 percent by county. The capitalization rate change increased land valuations by 3.8 percent in all counties; while the cost of production index decreased land values in all counties by 5.3 percent.Land valuation, real estate assessment, agricultural land, Agribusiness, Agricultural Finance, Land Economics/Use,

Generalized Hedge Ratio Estimation with an Unknown Model

Myers and Thompson (1989) noted that the model specification could have a large impact on the hedge ratio estimated. A huge literature exists on estimating hedge ratios, but the literature is lacking a formal treatment of model specification uncertainty. This research accomplishes that task by taking a Bayesian approach to hedge ratio estimation, where specification uncertainty is explicitly modeled. The methodology is applied to data on hedging of corn and soybeans and on cross-hedging of corn oil using soybean oil futures. Results show the potential benefits and insights gained from such an approach.Marketing,

COUNTY LEVEL TAXABLE AGRICULTURAL LAND VALUES IN NORTH DAKOTA: COMPARING THE GROSS REVENUE APPROACH WITH VALUES BASED ON RENTAL VALUES

Land values calculated with the current North Dakota agricultural land valuation model were compared with values calculated by capitalizing the average cash rent for each county. Results showed there was a significant difference in cropland values, but there was no significant difference in non-cropland values. Land values for the 2000, 2001, and 2002 assessments were compared.land valuation model, property taxes, North Dakota, Land Economics/Use,

Results of the North Dakota Land Valuation Model for the 2011 Agricultural Real Estate Assessment

This report summarizes the 2011 results of the North Dakota Land Valuation Model. The model is used annually to estimate average land values by county, based on the value of production from cropland and non-cropland. The county land values developed from this procedure form the basis for the 2011 valuation of agricultural land for real estate tax assessment. The average value for all agricultural land in a county from this analysis is multiplied by the total acres of agricultural land on the county abstract to determine each county’s total agricultural land value for taxation purposes. The State Board of Equalization compares this value with the total value assessed to agricultural property in each county. Each county is required by state statute to assess a total value of agricultural property within 5 percent of this value. The average value per acre of all agricultural land in North Dakota increased by 5.4 percent from 2010 to 2011 based on the value of production. The value of cropland increased by 6.0 percent, and non-cropland value decreased by 0.40 percent. The formula capitalization rate was below the minimum set by the State Legislature, therefore the minimum rate of 7.4 percent was used. The increase in the values for cropland and all agricultural land was due to the increased value of crop production. The value of production for most counties has been considerably higher since 2007 than prior years. This increase in value of production is a combination of increased yields, higher prices and a change in cropping mix. The change in crop revenue impacted land values from a negative 0.52 percent in Pembina County to an increase of 13.12 percent in Hettinger County. The capitalization rate change increased land valuations by 4.05 percent in all counties; while the cost of production index decreased land values in all counties by 5.72 percent. Changes in market value are included for comparison. Market value data are from the annual County Rents and Values survey conducted by North Dakota Agricultural Statistics Service.Land valuation, real estate assessment, agricultural land, Farm Management, Land Economics/Use,

Convective instability and transient growth in steady and pulsatile stenotic flows

We show that suitable initial disturbances to steady or long-period pulsatile flows in a straight tube with an axisymmetric 75%-occlusion stenosis can produce very large transient energy growths. The global optimal disturbances to an initially axisymmetric state found by linear analyses are three-dimensional wave packets that produce localized sinuous convective instability in extended shear layers. In pulsatile flow, initial conditions that trigger the largest disturbances are either initiated at, or advect to, the separating shear layer at the stenosis in phase with peak systolic flow. Movies are available with the online version of the paper

Convective instability and transient growth in flow over a backward-facing step

Transient energy growths of two- and three-dimensional optimal linear perturbations to two-dimensional flow in a rectangular backward-facing-step geometry with expansion ratio two are presented. Reynolds numbers based on the step height and peak inflow speed are considered in the range 0–500, which is below the value for the onset of three-dimensional asymptotic instability. As is well known, the flow has a strong local convective instability, and the maximum linear transient energy growth values computed here are of order 80×103 at Re = 500. The critical Reynolds number below which there is no growth over any time interval is determined to be Re = 57.7 in the two-dimensional case. The centroidal location of the energy distribution for maximum transient growth is typically downstream of all the stagnation/reattachment points of the steady base flow. Sub-optimal transient modes are also computed and discussed. A direct study of weakly nonlinear effects demonstrates that nonlinearity is stablizing at Re = 500. The optimal three-dimensional disturbances have spanwise wavelength of order ten step heights. Though they have slightly larger growths than two-dimensional cases, they are broadly similar in character. When the inflow of the full nonlinear system is perturbed with white noise, narrowband random velocity perturbations are observed in the downstream channel at locations corresponding to maximum linear transient growth. The centre frequency of this response matches that computed from the streamwise wavelength and mean advection speed of the predicted optimal disturbance. Linkage between the response of the driven flow and the optimal disturbance is further demonstrated by a partition of response energy into velocity components

The Equity of Public Education Funding in Georgia, 1988-1996

A study of the effect of Quality Basic Education on the level of equity of public education funding in Georgia