IDEAS home Printed from https://ideas.repec.org/a/ags/wjagec/32105.html
   My bibliography  Save this article

Machinery Investment Decisions: A Simulated Analysis For Cash Grain Farms

Author

Listed:
  • Gustafson, Cole R.
  • Barry, Peter J.
  • Sonka, Steven T.

Abstract

A combination of experimental and simulation procedures identify important factors in an Illinois cash grain farmer's machinery investment decisions. In an experiment setting, a panel of farmers based investment decisions on their own expectations, farm situations, and varying policy scenarios. In general, the results show investment levels statistically related to the tenure and leverage of operators, the economic conditions they faced, and the age of existing machinery. Alternative public policies of lower commodity price supports, tax reform, and interest rate subsidies influenced the timing of purchases but did not alter total investment amounts.

Suggested Citation

  • Gustafson, Cole R. & Barry, Peter J. & Sonka, Steven T., 1988. "Machinery Investment Decisions: A Simulated Analysis For Cash Grain Farms," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 13(2), pages 1-10, December.
    • Handle: RePEc:ags:wjagec:32105
    DOI: 10.22004/ag.econ.32105
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/32105/files/13020244.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.32105?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. A. J. Rayner & Keith Cowling, 1968. "Demand for Farm Tractors in the United States and the United Kingdom," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 50(4), pages 896-912.
    2. Hrubovcak, James & LeBlanc, Michael, 1985. "Tax Policy and Agricultural Investment," Technical Bulletins 157673, United States Department of Agriculture, Economic Research Service.
    3. Marvin T. Batte & Steven T. Sonka, 1985. "Before- and After-Tax Size Economies: An Example for Cash Grain Production in Illinois," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 67(3), pages 600-608.
    4. Anderson, Jock R. & Dillon, John L. & Hardaker, Brian, 1977. "Agricultural Decision Analysis," Monographs: Applied Economics, AgEcon Search, number 288652, July.
    5. 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.
    6. S. T. Sonka & B. L. Dixon & B. L. Jones, 1980. "Impact of Farm Financial Structure on the Credit Reserve of the Farm Business," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 62(3), pages 565-570.
    7. Simon, Herbert A., 1984. "On the behavioral and rational foundations of economic dynamics," Journal of Economic Behavior & Organization, Elsevier, vol. 5(1), pages 35-55, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hadrich, Joleen C. & Larsen, Ryan A. & Olson, Frayne E., 2012. "Incentives for Machinery Investment," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124897, Agricultural and Applied Economics Association.
    2. Hart, Chad Edward, 1999. "Examining agricultural investment," ISU General Staff Papers 1999010108000013567, Iowa State University, Department of Economics.
    3. LeBlanc, Michael & Hrubovcak, James & Durst, Ron L. & Conway, Roger K., 1992. "Farm Machinery Investment And The Tax Reform Act Of 1986," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 17(1), pages 1-14, July.
    4. Micheels, Eric T. & Katchova, Ani L. & Barry, Peter J., 2004. "Machinery Investment in Illinois: A Study Examining Existing Investment Motivations," 2004 Annual meeting, August 1-4, Denver, CO 20374, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. Gustafson, Cole R., 1989. "Stochastic Dynamic Modeling: An Aid To Agricultural Lender Decision Making," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 14(1), pages 1-9, July.
    6. Shockley, Jordan M. & Osborne, William A. & Dillon, Carl R. & Pierce, Jerry S., 2016. "A Two-Tiered Benchmarking Analysis for Cost Management," Journal of the ASFMRA, American Society of Farm Managers and Rural Appraisers, vol. 2016.
    7. Shockley, Jordan M. & Osborne, William A. & Dillon, Carl R. & Pierce, Jerry S., 2016. "A Two-Tiered Benchmarking Analysis for Cost Management," Journal of the ASFMRA, American Society of Farm Managers and Rural Appraisers, vol. 2015, pages 1-14.
    8. Cole R. Gustafson & Peter J. Barry & Steven T. Sonka, 1990. "Utilizing expectations to measure economic depreciation and capital gains of farm machinery," Agribusiness, John Wiley & Sons, Ltd., vol. 6(5), pages 489-503.
    9. Lajili, Kaouthar & Barry, Peter J. & Sonka, Steven T. & Mahoney, Joseph T., 1997. "Farmers' Preferences For Crop Contracts," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 22(2), pages 1-17, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. D. N. Cooper, 1994. "Net Investment In Agricultural Tractors," Journal of Agricultural Economics, Wiley Blackwell, vol. 45(3), pages 339-350, September.
    2. Anderson, Kim B. & Mapp, Harry P., Jr., 1996. "Risk Management Programs In Extension," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 21(1), pages 1-8, July.
    3. Doppler, Werner & Salman, Amer Z. & Al-Karablieh, Emad K. & Wolff, Heinz-Peter, 2002. "The impact of water price strategies on the allocation of irrigation water: the case of the Jordan Valley," Agricultural Water Management, Elsevier, vol. 55(3), pages 171-182, June.
    4. Sugu M.M. Zuhair & Daniel B. Taylor & Randall A. Kramer, 1992. "Choice of utility function form: its effect on classification of risk preferences and the prediction of farmer decisions," Agricultural Economics, International Association of Agricultural Economists, vol. 6(4), pages 333-344, April.
    5. Young, Douglas & Lin, William & Pope, Rulon & Robison, Lindon & Selley, Roger, 1979. "Risk Preferences Of Agricultual Producers:Their Measurement And Use," Risk Management in Agriculture: Behavioral, Managerial, and Policy Issues, January 25-26, 1979, San Francisco, California 271459, Regional Research Projects > W-149: An Economic Evaluation of Managing Market Risks in Agriculture.
    6. Serrao, Amilcar & Coelho, Luis, 2004. "Cumulative Prospect Theory: A Study Of The Farmers' Decision Behavior In The Alentejo Dryland Region Of Portugal," 2004 Annual meeting, August 1-4, Denver, CO 20245, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    7. Sheahan, Megan & Black, Roy & Jayne, T.S., 2013. "Are Kenyan farmers under-utilizing fertilizer? Implications for input intensification strategies and research," Food Policy, Elsevier, vol. 41(C), pages 39-52.
    8. Perry Warjiyo & Wallace E. Huffman, 1997. "Dynamic input demand functions and resource adjustment for US agriculture: state evidence," Agricultural Economics, International Association of Agricultural Economists, vol. 17(2-3), pages 223-237, December.
    9. Sheahan, Megan & Black, Roy & Jayne, Thomas S., 2012. "Are Farmers Under-Utilizing Fertilizer? Evidence from Kenya," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126739, International Association of Agricultural Economists.
    10. David J. Pannell, 1991. "Pests and pesticides, risk and risk aversion," Agricultural Economics, International Association of Agricultural Economists, vol. 5(4), pages 361-383, August.
    11. Randall Jones & Oscar Cacho & Jack Sinden, 2006. "The importance of seasonal variability and tactical responses to risk on estimating the economic benefits of integrated weed management," Agricultural Economics, International Association of Agricultural Economists, vol. 35(3), pages 245-256, November.
    12. CARPENTIER, Alain & GOHIN, Alexandre & SCKOKAI, Paolo & THOMAS, Alban, 2015. "Economic modelling of agricultural production: past advances and new challenges," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement (RAEStud), Institut National de la Recherche Agronomique (INRA), vol. 96(1), March.
    13. Gomez-Limon, Jose Antonio & Riesgo, Laura & Arriaza Balmón, Manuel, 2003. "Multi-Criteria Analysis Of Factors Use Level: The Case Of Water For Irrigation," 2003 Annual Meeting, August 16-22, 2003, Durban, South Africa 25836, International Association of Agricultural Economists.
    14. Parton, Kevin A., 2009. "Agricultural Decision Analysis: The Causal Challenge," 2009 Conference (53rd), February 11-13, 2009, Cairns, Australia 48150, Australian Agricultural and Resource Economics Society.
    15. Yochanan Shachmurove, 2012. "Failing Institutions Are at the Core of the U.S. Financial Crisis," PIER Working Paper Archive 12-040, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
    16. Rasmussen, Svend, 2003. "Criteria for optimal production under uncertainty. The state-contingent approach," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 47(4), pages 1-30.
    17. Berg, Ernst & Starp, Michael, 2006. "Farm Level Risk Assessment Using Downside Risk Measures," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25400, International Association of Agricultural Economists.
    18. Gomez-Limon, Jose A. & Riesgo, Laura, 2004. "Irrigation water pricing: differential impacts on irrigated farms," Agricultural Economics, Blackwell, vol. 31(1), pages 47-66, July.
    19. M. J. McGregor & P. K. Thornton, 1990. "Information Systems For Crop Management: Prospects And Problems," Journal of Agricultural Economics, Wiley Blackwell, vol. 41(2), pages 172-183, May.
    20. Hammida, Mustapha & Eidman, Vernon R., 1991. "Livestock And Poultry Production Risk In The United States," Staff Papers 14016, University of Minnesota, Department of Applied Economics.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:wjagec:32105. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/waeaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.