VALUE OF PREDICTORS OF UNCONTROLLED FACTORS IN RESPONSE FUNCTIONS

A method is developed for assessing the monetary value of additional information in the framework of a response process which involves interaction between controlled and uncontrolled factors. The method is illustrated through an analysis of the value of a rainfall predictor in determining optimal applications of nitrogen to wheat in an environment with variable rainfall. The analysis defines the conditions under which the predictor is most valuable and suggests types of predictors which may be of greater value.