The Conditional Beta Distribution as a Stochastic Production Function

The conditional beta distribution is proposed as a parametric model of the probability distribution of agricultural output. A two-stage maximum likelihood estimation procedure is shown to produce consistent, asymptotically efficient and normal estimates of maximum output and the parameters of the conditional distribution. Application of the procedure to data on com yield response to fertilizers shows that fertilizers have a significant impact on each of the first three moments of the distribution of com yield. Com yield distributions are found to be negatively skewed, implying that above average yields are more probable than below average yields.