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Impacts of the PIK Program on the Farm Machinery Market

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  • Kuchler, Fred
  • Vroomen, Harry

Abstract

Many analysts have claimed the record number of crop acres taken out of production in 1983 as a result of the Payment-in-Kind (PIK) program affected the already dechnmg sales offarm tractors The authors use intervention analysis, a particular form of a transfer function, to model and test for hypothesized changes in processes Three time senes (two two-wheel drive monthly sales classifications and one four-wheel drive sales classification).were modeled· as unwariate Autoregressive-Integrated-Moving-Average (ARIMA) processes These models were modified to incorporate the expected form of the PIK effects Results showed that PIK stgmficantly reduced unit sales of four-wheel drive tractors, but there was no statistical evidence of reduced sales for two-wheel drive tractors

Suggested Citation

  • Kuchler, Fred & Vroomen, Harry, 1987. "Impacts of the PIK Program on the Farm Machinery Market," Journal of Agricultural Economics Research, United States Department of Agriculture, Economic Research Service, vol. 39(3), pages 1-10.
    • Handle: RePEc:ags:uersja:136865
    DOI: 10.22004/ag.econ.136865
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    References listed on IDEAS

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    1. Timothy Hogan, 1984. "Evaluating the demographic impact of societal events through intervention analysis: The brown vs. Board of Education decision," Demography, Springer;Population Association of America (PAA), vol. 21(4), pages 673-677, November.
    2. Larcker, David F. & Gordon, Lawrence A. & Pinches, George E., 1980. "Testing for Market Efficiency: A Comparison of the Cumulative Average Residual Methodology and Intervention Analysis," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 15(2), pages 267-287, June.
    3. John B. Penson & Robert F. J. Romain & Dean W. Hughes, 1981. "Net Investment in Farm Tractors: An Econometric Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 63(4), pages 629-635.
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    Cited by:

    1. Canning, Patrick N. & Vroomen, Harry, 1994. "Welfare Impacts of a Trade Restriction: An Equilibrium Approach and Application in the Potash Industry," Technical Bulletins 156762, United States Department of Agriculture, Economic Research Service.

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