Valuing Climate Forecast Information

Abstract

Abstract The article describes research opportunities associated with evaluating the characteristics of climate forecasts in settings where sequential decisions are made. Illustrative results are provided for corn production in east central Illinois. These results indicate that the production process examined has sufficient flexibility to utilize climate forecasts for specific production seasons but the value of those forecasts is sensitive to economic parameters as well as forecasts characteristics. Forecasts periods of greatest importance, as well as the relationships between forecast value, accuracy, and lead time, are evaluated.