INCORPORATING GOVERNMENT PROGRAM PROVISIONS INTO A MEAN-VARIANCE FRAMEWORK

Abstract

E-V studies traditionally have relied on historical data to calculate returns and variance. Historical data may not fully reflect current conditions, particularly when decisions involve government-supported crops. This paper presents a method for calculating mean and variance using subjectively-estimated data. The method is developed for both government-supported and non-program crops. Comparisons to alternative methods suggest the approach provides reasonable accuracy.Agricultural and Food Policy,