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Is Farm Management Skill Persistent?

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  • Li, Xi
  • Paulson, Nicholas
  • Schnitkey, Gary

Abstract

Agricultural producers operate in a volatile environment, facing a number of sources of risk. A key question is whether farmers who are more highly skilled can better mitigate these risks and consistently earn higher returns than their lower skilled peers. In this article, farm management performance is analyzed based on yearly Illinois Farm Business Farm Management (FBFM) panel data across 6,760 farms from 1996 through 2011. Two out-of-sample measures of skill are used to analyze the ability of farm managers that consistently perform well over yearly and longer time horizons. Results suggest that the most skilled managers often generate better financial results. Furthermore, persistence tests show management skills are consistent and predictable.

Suggested Citation

  • Li, Xi & Paulson, Nicholas & Schnitkey, Gary, 2015. "Is Farm Management Skill Persistent?," 2015 Conference, August 9-14, 2015, Milan, Italy 212047, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae15:212047
    DOI: 10.22004/ag.econ.212047
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    Farm Management;

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