Activity 24 : Target MOTAD – Solution

Case with no risk aversion Risk Target-MOTAD
Cropping pattern 16 ha of durum wheat
108 ha of sunflower
100 ha of seed cabbage
100 ha of durum wheat
48 ha of seed maize
17 ha of seed cucumber
35 ha of seed cabbage
Land rental 24 ha 0
Average income 469 320 360 495
Minimum income (state of nature) -732 029 (E7) 60 000 (E1)
Standard deviation 650 654 221 934
Hired labour 408 heures 416 heures

In the case of a risk model, and particularly a target MOTAD model, the standard deviation is lower than in the same model with no risk factor. Indeed, taking risk aversion into account leads the model to opt for solutions in which incomes are less significant but closer to one another. This can be observed for example in the minimum income with -732029 in the model with no risk aversion versus 60000 in the model with the risk factor.

The farmer will stop renting land in the Target MOTAD model and will diversify her cropping patterns.

If you did not manage to write the model or in order to check whether your equations are accurate, compare with the following model : modelEco_lauragaisTargetMOTAD.gms.