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Optimal Use of Qualitative Models: An Application to Country Grain Elevator Bankruptcies

Published online by Cambridge University Press:  28 April 2015

Michael S. Kaylen ,
Gary T. Devino  and
Michael H. Procter
Michael S. Kaylen
Affiliation:
University of Missouri-Columbia
Gary T. Devino
Affiliation:
University of Missouri-Columbia
Michael H. Procter
Affiliation:
University of Missouri-Columbia
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Abstract

Qualitative models can be used for decision making under uncertainty. This provides a useful framework for evaluating the models. If the costs for every action/state of nature combination are known, decisions made using a well-calibrated model would result in actual costs being close to expected costs. In addition, the actual cost can be compared to the cost of perfect foresight actions, giving a bound on the value of a better model. Application of these procedures is made using a logit model developed to predict Missouri country grain elevator bankruptcies.

Keywords

bankruptcycountry grain elevatorsdecision ruleelevator regulationqualitative models
Type
Submitted Articles
Information
Journal of Agricultural and Applied Economics , Volume 20 , Issue 2 , December 1988 , pp. 119 - 126
Copyright
Copyright © Southern Agricultural Economics Association 1988

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