Biodiesel as a Substitute for Petroleum Diesel in a Stochastic Environment

Biodiesel as a Substitute for Petroleum Diesel in a Stochastic Environment

The objective of the research presented in this paper is the development of a stochastic adoption threshold. The option pricing approach for modeling investment under uncertainty is extended for the case of comparing two stochastic input prices associated with inputs that are perfect substitutes in...

Ausführliche Beschreibung

Gespeichert in:
Bibliographische Detailangaben
Veröffentlicht in:Journal of agricultural and applied economics 2000-08, Vol.32 (2), p.373-381
Hauptverfasser: Tareen, Irfan Y., Wetzstein, Michael E., Duffield, James A.
Format: Artikel
Sprache:eng
Schlagworte:
Invited Paper Sessions
Option pricing
production
renewable fuels
technology adoption under uncertainty
Online-Zugang:Volltext
Tags: Tag hinzufügen
Keine Tags, Fügen Sie den ersten Tag hinzu!
container_end_page 381
container_issue 2
container_start_page 373
container_title Journal of agricultural and applied economics
container_volume 32
creator Tareen, Irfan Y.
Wetzstein, Michael E.
Duffield, James A.
description The objective of the research presented in this paper is the development of a stochastic adoption threshold. The option pricing approach for modeling investment under uncertainty is extended for the case of comparing two stochastic input prices associated with inputs that are perfect substitutes in a production process. Based on this methodology, a threshold decision rule influenced by the drift and volatility of these two input prices is developed. Theoretical results establish an empirical link for measuring the tradeoff of a relatively more expensive input (biodiesel) with lower price drift and volatility compared with a lower but more volatile priced input (petroleum diesel).
doi_str_mv 10.1017/S1074070800020447
format Article
fullrecord <record><control><sourceid>proquest_cross</sourceid><recordid>TN_cdi_proquest_journals_1297804268</recordid><sourceformat>XML</sourceformat><sourcesystem>PC</sourcesystem><cupid>10_1017_S1074070800020447</cupid><sourcerecordid>1297804268</sourcerecordid><originalsourceid>FETCH-LOGICAL-c3227-bc7dcac0f43df5ce75fb5fadc4d4a6c5da31ca812360e1265bda9c3890e484603</originalsourceid><addsrcrecordid>eNp1kE1Lw0AQhhdRsFZ_gLeA5-jsd3rU2lZL8at68bJsNhtNbbJ1NxH99yakiCCeBmaed96ZF6FjDKcYsDxbYpAMJCQAQIAxuYMGBLiI2y7fRYNuHHfzfXQQwgqAEcKTAZpfFC4rbLDrSIdIR8smDXVRN7WNcuejO1t7t7ZNGV32UFF1UO3Mq245E02qj8K7qrRVfYj2cr0O9mhbh-hpOnkcX8WL29n1-HwRG0qIjFMjM6MN5IxmOTdW8jzluc4My5gWhmeaYqMTTKgAi4ngaaZHhiYjsCxhAugQnfR7N969NzbUauUaX7WWCpORTNrXRNJSuKeMdyF4m6uNL0rtvxQG1UWm_kTWauJeU4Tafv4ItH9TQlLJlZjdqwdx8yzpfKo6D7r10GXqi-zF_jrlX5dvZd18SQ</addsrcrecordid><sourcetype>Aggregation Database</sourcetype><iscdi>true</iscdi><recordtype>article</recordtype><pqid>1297804268</pqid></control><display><type>article</type><title>Biodiesel as a Substitute for Petroleum Diesel in a Stochastic Environment</title><source>AgEcon</source><source>Elektronische Zeitschriftenbibliothek - Frei zugängliche E-Journals</source><source>Periodicals Index Online</source><creator>Tareen, Irfan Y. ; Wetzstein, Michael E. ; Duffield, James A.</creator><creatorcontrib>Tareen, Irfan Y. ; Wetzstein, Michael E. ; Duffield, James A.</creatorcontrib><description>The objective of the research presented in this paper is the development of a stochastic adoption threshold. The option pricing approach for modeling investment under uncertainty is extended for the case of comparing two stochastic input prices associated with inputs that are perfect substitutes in a production process. Based on this methodology, a threshold decision rule influenced by the drift and volatility of these two input prices is developed. Theoretical results establish an empirical link for measuring the tradeoff of a relatively more expensive input (biodiesel) with lower price drift and volatility compared with a lower but more volatile priced input (petroleum diesel).</description><identifier>ISSN: 1074-0708</identifier><identifier>EISSN: 2056-7405</identifier><identifier>EISSN: 1074-0708</identifier><identifier>DOI: 10.1017/S1074070800020447</identifier><language>eng</language><publisher>New York, USA: Cambridge University Press</publisher><subject>Invited Paper Sessions ; Option pricing ; production ; renewable fuels ; technology adoption under uncertainty</subject><ispartof>Journal of agricultural and applied economics, 2000-08, Vol.32 (2), p.373-381</ispartof><rights>Copyright © Southern Agricultural Economics Association 2000</rights><lds50>peer_reviewed</lds50><oa>free_for_read</oa><woscitedreferencessubscribed>false</woscitedreferencessubscribed><citedby>FETCH-LOGICAL-c3227-bc7dcac0f43df5ce75fb5fadc4d4a6c5da31ca812360e1265bda9c3890e484603</citedby><cites>FETCH-LOGICAL-c3227-bc7dcac0f43df5ce75fb5fadc4d4a6c5da31ca812360e1265bda9c3890e484603</cites></display><links><openurl>$$Topenurl_article</openurl><openurlfulltext>$$Topenurlfull_article</openurlfulltext><thumbnail>$$Tsyndetics_thumb_exl</thumbnail><link.rule.ids>315,782,786,27876,27931,27932</link.rule.ids></links><search><creatorcontrib>Tareen, Irfan Y.</creatorcontrib><creatorcontrib>Wetzstein, Michael E.</creatorcontrib><creatorcontrib>Duffield, James A.</creatorcontrib><title>Biodiesel as a Substitute for Petroleum Diesel in a Stochastic Environment</title><title>Journal of agricultural and applied economics</title><addtitle>J. Agric. Appl. Econ</addtitle><description>The objective of the research presented in this paper is the development of a stochastic adoption threshold. The option pricing approach for modeling investment under uncertainty is extended for the case of comparing two stochastic input prices associated with inputs that are perfect substitutes in a production process. Based on this methodology, a threshold decision rule influenced by the drift and volatility of these two input prices is developed. Theoretical results establish an empirical link for measuring the tradeoff of a relatively more expensive input (biodiesel) with lower price drift and volatility compared with a lower but more volatile priced input (petroleum diesel).</description><subject>Invited Paper Sessions</subject><subject>Option pricing</subject><subject>production</subject><subject>renewable fuels</subject><subject>technology adoption under uncertainty</subject><issn>1074-0708</issn><issn>2056-7405</issn><issn>1074-0708</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>2000</creationdate><recordtype>article</recordtype><sourceid>HYQOX</sourceid><sourceid>K30</sourceid><recordid>eNp1kE1Lw0AQhhdRsFZ_gLeA5-jsd3rU2lZL8at68bJsNhtNbbJ1NxH99yakiCCeBmaed96ZF6FjDKcYsDxbYpAMJCQAQIAxuYMGBLiI2y7fRYNuHHfzfXQQwgqAEcKTAZpfFC4rbLDrSIdIR8smDXVRN7WNcuejO1t7t7ZNGV32UFF1UO3Mq245E02qj8K7qrRVfYj2cr0O9mhbh-hpOnkcX8WL29n1-HwRG0qIjFMjM6MN5IxmOTdW8jzluc4My5gWhmeaYqMTTKgAi4ngaaZHhiYjsCxhAugQnfR7N969NzbUauUaX7WWCpORTNrXRNJSuKeMdyF4m6uNL0rtvxQG1UWm_kTWauJeU4Tafv4ItH9TQlLJlZjdqwdx8yzpfKo6D7r10GXqi-zF_jrlX5dvZd18SQ</recordid><startdate>200008</startdate><enddate>200008</enddate><creator>Tareen, Irfan Y.</creator><creator>Wetzstein, Michael E.</creator><creator>Duffield, James A.</creator><general>Cambridge University Press</general><general>Southern Agricultural Economics Association</general><scope>BSCLL</scope><scope>AAYXX</scope><scope>CITATION</scope><scope>ADABO</scope><scope>BEAJS</scope><scope>HYQOX</scope><scope>K30</scope><scope>PAAUG</scope><scope>PAWHS</scope><scope>PAWZZ</scope><scope>PAXOH</scope><scope>PBHAV</scope><scope>PBQSW</scope><scope>PBYQZ</scope><scope>PCIWU</scope><scope>PCMID</scope><scope>PCZJX</scope><scope>PDGRG</scope><scope>PDPSG</scope><scope>PDWWI</scope><scope>PETMR</scope><scope>PEXHY</scope><scope>PFVGT</scope><scope>PGXDX</scope><scope>PIHIL</scope><scope>PISVA</scope><scope>PJCTQ</scope><scope>PJTMS</scope><scope>PLCHJ</scope><scope>PMHAD</scope><scope>PNQDJ</scope><scope>POUND</scope><scope>PPLAD</scope><scope>PQAPC</scope><scope>PQCAN</scope><scope>PQCMW</scope><scope>PQEME</scope><scope>PQHKH</scope><scope>PQMID</scope><scope>PQNCT</scope><scope>PQNET</scope><scope>PQSCT</scope><scope>PQSET</scope><scope>PSVJG</scope><scope>PVMQY</scope><scope>PZGFC</scope><scope>SAAPM</scope><scope>~P9</scope></search><sort><creationdate>200008</creationdate><title>Biodiesel as a Substitute for Petroleum Diesel in a Stochastic Environment</title><author>Tareen, Irfan Y. ; Wetzstein, Michael E. ; Duffield, James A.</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-LOGICAL-c3227-bc7dcac0f43df5ce75fb5fadc4d4a6c5da31ca812360e1265bda9c3890e484603</frbrgroupid><rsrctype>articles</rsrctype><prefilter>articles</prefilter><language>eng</language><creationdate>2000</creationdate><topic>Invited Paper Sessions</topic><topic>Option pricing</topic><topic>production</topic><topic>renewable fuels</topic><topic>technology adoption under uncertainty</topic><toplevel>peer_reviewed</toplevel><toplevel>online_resources</toplevel><creatorcontrib>Tareen, Irfan Y.</creatorcontrib><creatorcontrib>Wetzstein, Michael E.</creatorcontrib><creatorcontrib>Duffield, James A.</creatorcontrib><collection>Istex</collection><collection>CrossRef</collection><collection>Periodicals Archive Online Foundation Collection 3 (2022)</collection><collection>Periodicals Archive Online Foundation Collection 3</collection><collection>ProQuest Historical Periodicals</collection><collection>Periodicals Index Online</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - West</collection><collection>Primary Sources Access (Plan D) - International</collection><collection>Primary Sources Access &amp; Build (Plan A) - MEA</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - Midwest</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - Northeast</collection><collection>Primary Sources Access (Plan D) - Southeast</collection><collection>Primary Sources Access (Plan D) - North Central</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - Southeast</collection><collection>Primary Sources Access (Plan D) - South Central</collection><collection>Primary Sources Access &amp; Build (Plan A) - UK / I</collection><collection>Primary Sources Access (Plan D) - Canada</collection><collection>Periodicals Archive Online Collection 9.2</collection><collection>Primary Sources Access (Plan D) - EMEALA</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - North Central</collection><collection>Periodicals Archive Online Foundation Collection 3.2</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - South Central</collection><collection>Primary Sources Access &amp; Build (Plan A) - International</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - International</collection><collection>Primary Sources Access (Plan D) - West</collection><collection>Periodicals Index Online Segments 1-50</collection><collection>Primary Sources Access (Plan D) - APAC</collection><collection>Primary Sources Access (Plan D) - Midwest</collection><collection>Primary Sources Access (Plan D) - MEA</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - Canada</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - UK / I</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - EMEALA</collection><collection>Primary Sources Access &amp; Build (Plan A) - APAC</collection><collection>Primary Sources Access &amp; Build (Plan A) - Canada</collection><collection>Primary Sources Access &amp; Build (Plan A) - West</collection><collection>Primary Sources Access &amp; Build (Plan A) - EMEALA</collection><collection>Primary Sources Access (Plan D) - Northeast</collection><collection>Primary Sources Access &amp; Build (Plan A) - Midwest</collection><collection>Primary Sources Access &amp; Build (Plan A) - North Central</collection><collection>Primary Sources Access &amp; Build (Plan A) - Northeast</collection><collection>Primary Sources Access &amp; Build (Plan A) - South Central</collection><collection>Primary Sources Access &amp; Build (Plan A) - Southeast</collection><collection>Primary Sources Access (Plan D) - UK / I</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - APAC</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - MEA</collection><collection>Periodicals Index Online Segment 42</collection><collection>Periodicals Archive Online Collection 9</collection><jtitle>Journal of agricultural and applied economics</jtitle></facets><delivery><delcategory>Remote Search Resource</delcategory><fulltext>fulltext</fulltext></delivery><addata><au>Tareen, Irfan Y.</au><au>Wetzstein, Michael E.</au><au>Duffield, James A.</au><format>journal</format><genre>article</genre><ristype>JOUR</ristype><atitle>Biodiesel as a Substitute for Petroleum Diesel in a Stochastic Environment</atitle><jtitle>Journal of agricultural and applied economics</jtitle><addtitle>J. Agric. Appl. Econ</addtitle><date>2000-08</date><risdate>2000</risdate><volume>32</volume><issue>2</issue><spage>373</spage><epage>381</epage><pages>373-381</pages><issn>1074-0708</issn><eissn>2056-7405</eissn><eissn>1074-0708</eissn><abstract>The objective of the research presented in this paper is the development of a stochastic adoption threshold. The option pricing approach for modeling investment under uncertainty is extended for the case of comparing two stochastic input prices associated with inputs that are perfect substitutes in a production process. Based on this methodology, a threshold decision rule influenced by the drift and volatility of these two input prices is developed. Theoretical results establish an empirical link for measuring the tradeoff of a relatively more expensive input (biodiesel) with lower price drift and volatility compared with a lower but more volatile priced input (petroleum diesel).</abstract><cop>New York, USA</cop><pub>Cambridge University Press</pub><doi>10.1017/S1074070800020447</doi><tpages>9</tpages><oa>free_for_read</oa></addata></record>
fulltext fulltext
identifier ISSN: 1074-0708
ispartof Journal of agricultural and applied economics, 2000-08, Vol.32 (2), p.373-381
issn 1074-0708
2056-7405
1074-0708
language eng
recordid cdi_proquest_journals_1297804268
source AgEcon; Elektronische Zeitschriftenbibliothek - Frei zugängliche E-Journals; Periodicals Index Online
subjects Invited Paper Sessions
Option pricing
production
renewable fuels
technology adoption under uncertainty
title Biodiesel as a Substitute for Petroleum Diesel in a Stochastic Environment
url https://sfx.bib-bvb.de/sfx_tum?ctx_ver=Z39.88-2004&ctx_enc=info:ofi/enc:UTF-8&ctx_tim=2024-12-05T04%3A34%3A32IST&url_ver=Z39.88-2004&url_ctx_fmt=infofi/fmt:kev:mtx:ctx&rfr_id=info:sid/primo.exlibrisgroup.com:primo3-Article-proquest_cross&rft_val_fmt=info:ofi/fmt:kev:mtx:journal&rft.genre=article&rft.atitle=Biodiesel%20as%20a%20Substitute%20for%20Petroleum%20Diesel%20in%20a%20Stochastic%20Environment&rft.jtitle=Journal%20of%20agricultural%20and%20applied%20economics&rft.au=Tareen,%20Irfan%20Y.&rft.date=2000-08&rft.volume=32&rft.issue=2&rft.spage=373&rft.epage=381&rft.pages=373-381&rft.issn=1074-0708&rft.eissn=2056-7405&rft_id=info:doi/10.1017/S1074070800020447&rft_dat=%3Cproquest_cross%3E1297804268%3C/proquest_cross%3E%3Curl%3E%3C/url%3E&disable_directlink=true&sfx.directlink=off&sfx.report_link=0&rft_id=info:oai/&rft_pqid=1297804268&rft_id=info:pmid/&rft_cupid=10_1017_S1074070800020447&rfr_iscdi=true