|Abstract or Summary
- The purpose of this study was to investigate factors which
may limit linear programming as a predictive tool. It has specifically centered attention on components of linear programming
models and characteristics of farm operators which create differences
between actual and linear programmed farm organizations.
Twenty farms in Wasco County, Oregon, were selected for the
empirical investigation. Data on enterprise costs, technical
coefficients, and restraints were obtained from each farmer.
Additional information on age, education, farming experience,
family size, and income were also obtained for each farmer.
Three programming models were constructed for each farm.
Model I represented year-to-year choices among alternative levels
of participation in government wheat and feed grain programs.
Separate models were developed for each of the years from 1963
to 1966 which represented the program alternatives in these four years. The purpose of Model I was to calculate profit maximizing
solutions for individual farms in this short-run context, to make
comparisons with actual decisions of the farmers within the same
framework, and to isolate factors which created differences between
the actual and programmed solutions.
Model II was constructed to predict individual farm organization
where the planning horizon was sufficiently long for changes
to occur in resource use patterns and enterprise combinations.
Land, family labor, and in some cases operating capital, were
treated as fixed resources. The objectives of the Model II
analysis were to evaluate the degree of association between the
actual and profit maximizing programmed farm organizations and
to aid in determining factors which caused differences between
the two solutions.
Model III was the same as Model II except that its objective
function required the least-cost organization for obtaining a
given level of income. Its purpose was to provide an alternative
representation of the objectives which guided the farmers in their
The Model I analysis indicated that farmers did not make the
profit maximizing decisions with respect to choices of government
programs. The main factors which hindered them were continual
changes in programs and associated incentives and inability to
individually assess the economic consequences of alternative
program participation. The more educated farmers made the better decisions while poorer decisions were made on highly
The Model II analysis indicated that maximum profit models
did not accurately predict the decisions of farmers. However,
they did perform better in the short run than in the longer run
situations. They also predicted production for major enterprises
better than for supplementary enterprises.
Model III with its minimum cost objective described the
organization of more than 50 percent of the farmers more completely
than the maximum profit model.
Errors in specification of enterprises to include in the
models were a major source of differences between actual and
programmed organization. Enterprises must not only be physically
and economically feasible but also psychologically acceptable to
Characteristics such as education, family size, age, and
experience were found to be associated with the farmer's management