Portfolio optimization techniques for a mixed-grazing scenario for Australia's rangelands

Moloney, P.D., Hearne, J.W., Gordon, I.J., and McLeod, S.R. (2011) Portfolio optimization techniques for a mixed-grazing scenario for Australia's rangelands. Natural Resource Modeling, 24 (1). pp. 102-116.

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Currently pastoralists in Australia view native mammal species as one of many variables that impact, usually negatively, on their productivity and therefore profitability. This does not necessarily have to be the case. The species with the largest impact, kangaroos, have a value that could be incorporated into their income stream as a method of both reducing risk and increasing biodiversity, and therefore increasing resilience. An investigation of the idea of optimally allocating stocking rates using techniques analogous to classical portfolio selection optimization is conducted. Using historical pricing data for beef, wool, and kangaroo meat, an efficient frontier is formed to analyze the best scenario dependent on an investors risk aversion. It is shown that there is a clear opportunity for pastoralists to benefit economically by the inclusion of kangaroos in a mixed-grazing strategy for Australian rangelands.

Item ID: 42425
Item Type: Article (Research - C1)
ISSN: 1939-7445
Keywords: portfolio optimization, mean-variance optimization, mixed grazing, kangaroo, rangelands, multi-objective optimization problems (MOP)
Date Deposited: 03 Feb 2016 15:12
FoR Codes: 07 AGRICULTURAL AND VETERINARY SCIENCES > 0701 Agriculture, Land and Farm Management > 070101 Agricultural Land Management @ 100%
SEO Codes: 97 EXPANDING KNOWLEDGE > 970107 Expanding Knowledge in the Agricultural and Veterinary Sciences @ 100%
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