Temperature Probabilities and the Bayesian No Data' Problem

Abstract

Weather constitutes an exogenous factor in agriculture which may have considerable influence on production and marketing. For a particular commodity, weather may influence quantity produced, quality of the commodity marketed, and consequently influence prices received (or paid) by various firms associated with that commodity system. Although some has been written about the influence of weather on agriculture, little economic analysis is available which attempts to integrate estimated probabilities of some weather phenomenon (a notable exception is McQuigg and Doll). This latter situation may be attributed, at least partially, to the complexities of such an integrative analysis.