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Predicting Farm Tractor Values through Alternative Depreciation Methods

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  • Troy J. Dumler
  • Robert O. Burton
  • Terry L. Kastens

Abstract

This study compares a variety of farm tractor depreciation methods to determine which most accurately estimates farm tractor values. These alternative depreciation methods consider different factors for estimating remaining value and vary in difficulty of use. Pairwise comparisons of mean absolute percentage error and forecast accuracy regression models were used to evaluate the accuracy of the depreciation methods, which depend on age, intensity of use, and manufacturer. Based on the results of this study, the Cross and Perry method was generally the most accurate.

Suggested Citation

  • Troy J. Dumler & Robert O. Burton & Terry L. Kastens, 2003. "Predicting Farm Tractor Values through Alternative Depreciation Methods," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 25(2), pages 506-522.
    • Handle: RePEc:oup:revage:v:25:y:2003:i:2:p:506-522.
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    File URL: http://hdl.handle.net/10.1111/1467-9353.00152
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    References listed on IDEAS

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    1. Timothy L. Cross & Gregory M. Perry, 1995. "Depreciation Patterns for Agricultural Machinery," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(1), pages 194-204.
    2. LeRoy Hansen & Hyunok Lee, 1991. "Estimating Farm Tractor Depreciation: Tax Implications," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 39(3), pages 463-479, November.
    3. James Unterschultz & Glen Mumey, 1996. "Reducing Investment Risk in Tractors and Combines with Improved Terminal Asset Value Forecasts," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 44(3), pages 295-309, November.
    4. Gregory M. Perry & Ahmet Bayaner & Clair J. Nixon, 1990. "The Effect of Usage and Size on Tractor Depreciation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(2), pages 317-325.
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    Cited by:

    1. Daninger, Nathan & Gunderson, Michael A., 2017. "The Pricing and Depreciation Patterns of Used Tractors," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258282, Agricultural and Applied Economics Association.
    2. Ivan Herranz-Matey & Luis Ruiz-Garcia, 2023. "A New Method and Model for the Estimation of Residual Value of Agricultural Tractors," Agriculture, MDPI, vol. 13(2), pages 1-20, February.
    3. Luis Ruiz-Garcia & Patricia Sanchez-Guerrero, 2022. "A Decision Support Tool for Buying Farm Tractors, Based on Predictive Analytics," Agriculture, MDPI, vol. 12(3), pages 1-26, February.
    4. Kenkel, Philip L. & Kilima, Fredy, 2004. "Optimal Fertilizer Warehousing and Distribution Systems for Farm Supply Cooperatives," 2004 Annual Meeting, November 2-3 31795, NCERA-194 Research on Cooperatives.
    5. Lips, Markus & Burose, Frank, 2012. "Repair and Maintenance Costs for Agricultural Machines," International Journal of Agricultural Management, Institute of Agricultural Management, vol. 1(3), pages 1-7.

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