Section 4

Section  6 

 

Tradeoff Analysis: On-line course Kenya

Section 5 - Model estimation

 

In this previous section we described the basic economic and environmental data to run the Tradeoff Analysis System. With the available data we are now going to estimate the econometric simulation model. A key factor influencing management decisions is the inherent productivity of the land unit. The model estimation phase comprises therefore two steps:

  1. Calculation of the inherent productivity for the survey fields using crop growth models.
  2. Estimation of the econometric simulation model

 

Calculation of the inherent productivities

The inherent productivities are calculated using crop growth simulation models from the DSSAT suite of models. In the case of Machakos we identified 5 different systems: intercropping with maize, vegetables and legumes; monocropped maize, vegetables, pasture grass, and maize intercropped with beans. In addition there are two livestock products, milk and manure. For several of these individual crops we do not have crop growth simulation models available that can estimate the inherent productivities. In the current setup we will calculate the inherent productivities for maize and beans only.  Likewise for livestock, bio-physical simulation models could be used to calculate inherent productivity (e.g., based on dairy production) but are not available in this example.

 

Exercise 6: Inherent productivity calculation

  1. Go to settings - activities in the main menu. Which activities have been defined?
  2. Go to the model estimation button in the tradeoff analysis system and check where the inherent productivities can be calculated. Calculate the inherent productivity of each crop.
  3. Open the output file with the inherent productivities. Can you explain some of the differences in the inherent productivities?

 

Run the econometric models 

With the available data on the inherent productivities we can now estimate the econometric production models for the different crops and estimate the parameters of the price and exogenous variable distributions.

 

Exercise 7: Econometric model estimation

  1. Go to settings - economic models in the main menu. Here you will be able to find the different econometric production models and the location of the SAS software (Note that also the economic simulation model to be discussed in the next section is defined here).
  2. Go to the model estimation button in the tradeoff analysis system and run the econometric production models.
  3. If you are interested you can check the "view log files after each SAS model run". In the economic session details will be presented on these economic models.

Section 4

Section 6