Variable-rate nitrogen application under uncertainty: Implications for profitability and nitrogen use

Murat Isik, Madhu Khanna

Research output: Contribution to journalArticlepeer-review


A micro-level model of farmer decision making is developed to examine the extent to which uncertainty about potential yields influences the value of site-specific technologies. The economic and environmental benefits of these technologies arise from two sources: information gathering and variable-rate nitrogen application. Application of the model to fields in Illinois shows the value of variable-rate nitrogen application is higher on fields with low average potential yields, high spatial variability, positively skewed potential yield distributions, responsive yield to nitrogen, and low uncertainty. Variable-rate application decreases nitrogen use by reducing the extent of overapplication. However, in the presence of uncertainty about potential yields, the incentives to overapply nitrogen irrespective of the method of application, uniform or variable rate, can reduce the economic and environmental benefits of site-specific technologies.

Original languageEnglish (US)
Pages (from-to)61-76
Number of pages16
JournalJournal of Agricultural and Resource Economics
Issue number1
StatePublished - Jul 2002
Externally publishedYes


  • Nitrogen overapplication
  • Site specific
  • Spatial variability
  • Technology adoption
  • Uncertainty

ASJC Scopus subject areas

  • Animal Science and Zoology
  • Agronomy and Crop Science
  • Economics and Econometrics


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