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An Expected Value Of Sample Information (Evsi) Approach For Estimating The Payoff From A Variable Rate Technology., Pedro Vertino De Queiroz, Richard Perrin, Lilyan E. Fulginiti, David S. Bullock

Department of Agricultural Economics: Faculty Publications

This paper examines the payoff to variable rate technology (VRT) using a Bayesian approach following literature on the expected value of sample information (EVSI). In each cell within a field, we compare the expected payoff from an optimal variable rate conditioned on a signal from that cell, with the expected payoff from a uniform rate technology (URT) that is optimal for all cells in the field. This comparison, when evaluated across the theoretical distribution of signals, provides an estimate of the expected gross benefit from VRT relative to URT. Under plausible assumptions, a closed-form algebraic solution relates this expected benefit …