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Title: Continuum of risk analysis methods to assess tillage system sustainability at the experimental plot level

Author
item Fathelrahman, Eihab
item Ascough Ii, James
item HOAG, DANA - COLORADO STATE UNIVERSITY
item Malone, Robert - Rob
item Heilman, Philip - Phil
item Wiles, Lori
item KANWAR, RAMESH - Iowa State University

Submitted to: Sustainability
Publication Type: Peer Reviewed Journal
Publication Acceptance Date: 7/11/2011
Publication Date: 7/20/2011
Citation: Fathelrahman, E.M., Ascough II, J.C., Hoag, D.L., Malone, R.W., Heilman, P., Wiles, L., Kanwar, R.S. 2011. Continuum of risk analysis methods to assess tillage system sustainability at the experimental plot level. Sustainability. 3(7):1035-1063. DOI:10.3390/su3071035.

Interpretive Summary: The primary goal of this study was to evaluate the efficacy of decision criteria, stochastic dominance, and stochastic efficiency with respect to a function (SERF) methodology for ranking conventional and conservation tillage systems using 14 years (1990-2003) of economic budget data collected from 36 plots at the Iowa State University Northeast Research Station near Nashua, IA. Four tillage system alternatives (chisel plow, moldboard plow, no-till, and ridge till) were analyzed. Decision criteria analysis of the economic measures alone provided somewhat contradictive and non-conclusive rankings, e.g., examination of the decision criteria results for corn and soybean gross margin and net return showed that different tillage system alternatives were the highest ranked depending on the criterion and the crop. Stochastic dominance analysis results were very similar for both second-degree stochastic dominance and stochastic dominance with respect to a function, i.e., for both methods the moldboard plow tillage system alternative was the highest ranked for corn gross margin and the no-till tillage system alternative was the highest ranked for soybean gross margin. SERF analysis results were also dependent on the crop type (corn or soybean), economic outcome of interest (gross margin or net return) and level of risk aversion. The moldboard plow tillage system was preferred across the entire range of risk aversion for the corn gross margin and soybean net return analyses, while the ridge-till system was preferred across the entire range of risk aversion for the corn net return analysis. For the soybean gross margin analysis, the no-till system was preferred except at the extreme risk aversion level.

Technical Abstract: The primary goal of this study was to evaluate the efficacy of stochastic dominance and stochastic efficiency with respect to a function (SERF) methodology for ranking conventional and conservation tillage systems using 14 years (1990-2003) of economic budget data collected from 36 plots at the Iowa State University Northeast Research Station near Nashua, IA. Four tillage system alternatives (chisel plow, moldboard plow, no-till, and ridge till) were analyzed. For the stochastic dominance analysis, the tillage system alternatives were ranked using second-degree stochastic dominance (SSD) and stochastic dominance with respect to a function (SDRF). For the SERF analysis, certainty equivalent (CE) values for gross margin and net return by crop were calculated for each tillage system alternative. In addition to the SERF analysis, an economic analysis of the tillage system alternatives was also performed using decision criteria and simple statistical measures. Finally, the visually-based Stoplight method was employed for displaying gross margin and net return probability distribution information at cutoff points one standard deviation above and below mean values. Decision criteria analysis of the economic measures alone provided somewhat contradictive and non-conclusive rankings, e.g., examination of the decision criteria results for corn and soybean gross margin and net return showed that different tillage system alternatives were the highest ranked depending on the criterion and the crop. Stochastic dominance analysis results were very similar for both SSD and SDRF, i.e., for both methods the moldboard plow tillage system alternative was the highest ranked for corn gross margin and the no-till tillage system alternative was the highest ranked for soybean gross margin. SERF analysis results were also dependent on the crop type (corn or soybean), economic outcome of interest (gross margin or net return) and level of risk aversion. The moldboard plow tillage system was preferred across the entire range of risk aversion for the corn gross margin and soybean net return analyses, while the ridge-till system was preferred across the entire range of risk aversion for the corn net return analysis. For the soybean gross margin analysis, the no-till system was preferred except at the extreme risk aversion level.