The Dynamics of Farm Land Allocation – Short and Long Run Reactions in a Long Micro Panel
AbstractThis study develops a dynamic multi-output model of farmers’ crop allocation decisions that allows estimation of both short-run and long-run adjustments to a wide array of economic incentives. The method can be used to inform decision-makers about a number of issues including agricultural policy reform and environmental regulation. The model allows estimation of dynamic effects relating to price expectations adjustment, investment lags and crop rotation constraints. Estimation is based on micro-panel data from Danish farmers that includes acreage, output and variable input utilisation at the crop level. Results indicate that there are substantial differences between the shortrun and long-run land allocation behaviour of Danish farmers and that there are substantial differences in the time lags associated with different crops. Since similar farming conditions are found in northern Europe and parts of the USA and Canada, this result may have more general interest.
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Bibliographic InfoPaper provided by University of Copenhagen, Department of Food and Resource Economics in its series IFRO Working Paper with number 2010/3.
Length: 28 pages
Date of creation: May 2010
Date of revision:
land allocation; crop rotation; system of dynamic equations; micro panel data; GMM;
Other versions of this item:
- Arnberg, Soren & Hansen, Lars Garn, 2007. "The Dynamics of Farm Land Allocation - Short and Long Run Reactions in Long Micro Panel," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon TN 9978, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
- Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
- Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
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