An evaluation of methods of estimating 1953 costs of producing strawberries Public Deposited

http://ir.library.oregonstate.edu/concern/graduate_thesis_or_dissertations/2801pj49z

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  • The purpose of this thesis was to evaluate two methods of estimating 1953 costs of producing strawberries. To accomplish this the following steps were taken: 1. To estimate production costs in 1953 by using 1947 input data and 1953 prices for those inputs, (Method 1); 2. To compare the results of the preceding method with the index number method of revising the cost data, (Method 2); To evaluate the two methods of revising the cost data. By the use of Method 1 the production cost per pound was 16.4 based on an average yield of 39609 pounds per acre. This amounted to an average total cost of $590.30 per acre. Considerable variation existed among the 53 producers whose records were used, with the higher yielding producers tending to have lower costs. When the index number method was used, the cost was 16.5 cents per pound. This is only 0.1 cents more than costs revised with the actual prices paid for the inputs. Because these costs are nearly identical, no significant difference appears to exist between the results of the two methods. However, it must be noted that this comparison is for only one crop and one crop year. Different results may be obtained for different crops and for different years. 3. The following conclusions were drawn with respect to the two methods: 1. Method 1 is based on prices paid to produce the crop. This is in contrast to costs revised with indices which include items not actually used in the production of strawberries. 2. With Method 1 only prices prevailing in the production area are used. On the other hand, costs revised with index numbers are affected by state and/or national prices for commodities which may or may not be used to produce strawberries. 3. More computations are necessary to revise the costs in Method 1 than Method 2. Costs revised by Method 1 require about 25 computations to revise each producer's data plus about 20 more to determine the sample average. By contrast, only six computations are necessary to revise cost data with index numbers. 4. By using the principles of both methods it may be possible to retain some of the advantages of both methods. A cost index based on local prices would be more realistic than more general indices and would retain the simplicity of the index number method now used.
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