Avoid sunk cost interfering with your decisions – Economic Video Series

This short economic video on helping to avoid sunk cost follows Pete, a broadacre farmer who is wanting to have a good harvest this season, but grain prices are low. Pete believes prices might improve in the future. He decides to purchase grain storage and pays a $20,000 deposit. However prices rise at harvest and the deposit for the grain storage is non refundable. Watch below to see what this means for Pete.

 

 

This video is part of a series of economic videos developed as part of the CropPro project. The others in the series are:

Use the CropPro Option$ analysis tool to test and compare likely net income, best option and return on investment outcomes for crop management options.

Acknowledgements

Andrew Zull (Queensland Government, Department of Agriculture and Fisheries)

Chris Carter (AEGIC (formerly Government of Western Australia, Department of Primary Industries and Regional Development))

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