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Farming-specific Adjustment Costs in Dutch Pig Farming.
- Source :
-
Journal of Agricultural Economics . Mar2004, Vol. 55 Issue 1, p3-24. 22p. 2 Charts. - Publication Year :
- 2004
-
Abstract
- This paper develops a dynamic model of investment under rational expectations, assuming farm-specific production technologies and adjustment cost structures. The model distinguishes regimes of negative, zero and positive investments and maintains that it is optimal for a farmer not to invest for a range of shadow prices, depending on thresholds for positive and negative investments. The model is applied to a rotating sample of Dutch pig farms over the period 1980-1996. Farm-specific parameters of the adjustment cost function and production technology are obtained using Generalised Maximum Entropy estimation. Cluster analysis using the farm-specific adjustment cost parameters indicates that five groups of farms with distinct adjustment cost structures can be identified. A tobit regression analysis is used to explain the impact of different socio-economic factors on the size of the threshold between positive and negative investments. [ABSTRACT FROM AUTHOR]
- Subjects :
- *AGRICULTURE
*FARMS
*FARM management
*COST structure
*FARM produce
*INVESTMENTS
Subjects
Details
- Language :
- English
- ISSN :
- 0021857X
- Volume :
- 55
- Issue :
- 1
- Database :
- Academic Search Index
- Journal :
- Journal of Agricultural Economics
- Publication Type :
- Academic Journal
- Accession number :
- 13818077
- Full Text :
- https://doi.org/10.1111/j.1477-9552.2004.tb00076.x