Econometric ridge regression models of risk-sensitive sunflower yield

Abstract

ABSTRACT The article considers econometric ridge regression models of the risk-sensitive sunflower yield on the example of an export-oriented agricultural crop. In particular, we have proved that despite the functional mulcollinearity of the predictors in the sunflower yield model with respect to risk caused by the algorithm peculiarities of the hierarchy analysis methods, the ridge regression procedure makes it possible to obtain its complete specification and provide biased but stable estimates of the forecast parameters in the case of uncertain input variables. It has been substantiated that the rational value of the displacement parameters is expedient to be established using a graphical interpretation of the ridge wake as the border of fast and slow fluctuations in the estimates of the ridge regression coefficients. Econometric models were calculated using SPSS Statistics, Mathcad and FAR-AREA 4.0 software. The empirical basis for forecast calculations was the assessment of trends in sunflower production in all categories of farms in the Rostov region of Russia for the period of 2008-2018. The calculation results of econometric models made it possible to develop three author's scenarios for the sunflower production in the region, namely, inertial, moderate, and optimistic ones that consider the export-oriented strategy of the agro-industrial complex.

Keywords

• forecasting
• agricultural production
• export-oriented strategy
• econometric models
• ridge regression