Using Spatial Analysis to Study the Values of Variable Rate Technology and Information

We present a review of the last few years' literature on the economic feasibility of variable rate technology in agriculture. Much of the research on this topic has involved the estimation of site-specific yield response functions. Data used for such estimations most often inherently lend themselves to spatial analysis. We discuss the different types of spatial analyses that may be appropriate in estimating various types yield response functions. Then, we present a taxonomy for the discussion of the economics of precision agriculture technology and information. We argue that precision agriculture technology and information must be studied together since they are by nature economic complements. We contend that longer-term, multi-location agronomic experiments are needed for the estimation of ex ante optimal variable input rates and the expected profitability of variable rate technology and information gathering. We use our taxonomy to review the literature and its results with consistency and rigor.