The gross soybean processing margin (the gross return per bushel of soybeans processed) is the main decision variable that processors use in deciding when and if to make binding commitments to process soybeans on future dates. Understanding how processors choose processing margins for future...

The debate about the "quasi" moratorium on the release of GMOs in the European Union is on going. One of the major arguments that were put forward to delay the release of new traits was the one for more information. In this contribution we compare the situation for Bt-maize from the 1995 and...

NPV and LEV are established and common approaches to valuing single rotation and infinite rotation forests respectively, when the rotation age is fixed in advanced. More recently, Real Options approaches have been employed to value single and infinite rotation forests with a flexible harvest...

This paper reports a use of a real-options valuation methodology to analyse wine grape farm investment under price and yield uncertainty. Revenue levels to incentivise entry and exit were calculated for three different sizes of wine grape farms in North West Victoria. The modelling identified...

Vietnam grew from an insignificant to the world’s second largest coffee producer during the 1990s. To understand this growth, this paper examines Vietnamese coffee growers’ investment decisions using real options theory. The study finds that producers, with variable costs of 19 cents/lb and...

This paper studies a land use switching model as a measure of adaptation to climate change in tart cherry industry in Michigan. In order to capture the effects of extreme events, we employ a real options land conversion model where an underlying stochastic process allows a Poisson-type jump...

Latest developments in investment analysis offer a number of valuable insights into how to evaluate investment opportunities encountering the weaknesses of net present value criterion. More specific, irreversibility, uncertainty and the choice of timing are conditions that net present value does...

The gum tree (Acacia senegal) in the Sahel-Sudan zone has many environmental benign functions. An important function is to control desertification. In this paper we analyze farmers' economic incentives to preserve the existing gum trees and their incentives to create new plantations using a real...

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