Risk analysis in the economic appraisal of a smallholder agricultural development project in Papua New Guinea

Kwabena A. Anaman*

*Corresponding author for this work

    Research output: Contribution to journalArticlepeer-review

    Abstract

    Risk analysis in an economic appraisal of a smallholder integrated agricultural development project in Papua New Guinea was undertaken using a spreadsheet simulation model based on the use of several probability distribution functions to specify the uncertainty involved in seven major stochastic variables. The results indicated that there were differences between the estimated net present value and the internal rate of return (used to measure the economic viability of the project) when compared with those derived from the traditional deterministic approach of using the certain or most likely figures for all input variables. The level of actual government project expenditures as a proportion of planned approved government costs appears to be a major determinant of project viability.

    Original languageEnglish
    Pages (from-to)397-413
    Number of pages17
    JournalAgricultural Systems
    Volume43
    Issue number4
    DOIs
    Publication statusPublished - 1993

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