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Succession In Family Farm Business: Empirical Evidence From The U.S. Farm Sector

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  • Mishra, Ashok K.
  • El-Osta, Hisham S.
  • Johnson, James D.

Abstract

Survival of many family farms is dependent on successful intergenerational transfer. Given the importance of succession in the farm sector, the purpose of this paper is to examine factors that are likely to influence succession decisions on U.S. farms. The paper uses 2001 ARMS data and a multinomial Logit (MNL) regression to estimate family succession, non-family succession, and farm exit decisions of farm households in the U.S. Model choice and specification issues are discussed. Results indicate that operator's education, household wealth, growth in farm size, and farm debt are important factors that determine succession decisions. Additionally, farm specialization is taken into consideration when farm operators make their succession plans.

Suggested Citation

  • Mishra, Ashok K. & El-Osta, Hisham S. & Johnson, James D., 2004. "Succession In Family Farm Business: Empirical Evidence From The U.S. Farm Sector," 2004 Annual meeting, August 1-4, Denver, CO 20114, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  • Handle: RePEc:ags:aaea04:20114
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    References listed on IDEAS

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    2. Pesquin, Claudio & Kimhi, Ayal & Kislev, Yoav, 1999. "Old Age Security and Inter-Generational Transfer of Family Farms," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 26(1), pages 19-37, March.
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    5. Ashok K. Mishra & Barry K. Goodwin, 1997. "Farm Income Variability and the Supply of Off-Farm Labor," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(3), pages 880-887.
    6. Guinnane, Timothy W., 1992. "Intergenerational transfers, emigration, and the rural Irish household system," Explorations in Economic History, Elsevier, vol. 29(4), pages 456-476, October.
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    8. Ashok K. Mishra & Carmen L. Sandretto, 2002. "Stability of Farm Income and the Role of Nonfarm Income in U.S. Agriculture," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 24(1), pages 208-221.
    9. Ayal Kimhi & Noga Nachlieli, 2001. "Intergenerational Succession on Israeli Family Farms," Journal of Agricultural Economics, Wiley Blackwell, vol. 52(2), pages 42-58.
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    12. Tweeten, Luther G. & Zulauf, Carl R., 1994. "Is farm operator succession a problem?," Choices, Agricultural and Applied Economics Association, vol. 9(2).
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    14. McElroy, Marjorie B & Horney, Mary Jean, 1981. "Nash-Bargained Household Decisions: Toward a Generalization of the Theory of Demand," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 22(2), pages 333-349, June.
    15. Nerlove, Marc & Razin, Assaf & Sadka, Efraim, 1984. "Investment in Human and Nonhuman Capital, Transfers among Siblings, and the Role of Government," Econometrica, Econometric Society, vol. 52(5), pages 1191-1198, September.
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    Cited by:

    1. Glauben, Thomas & Tietje, Hendrik & Weiss, Christoph R., 2005. "Analysing Family Farm Succession: A Probit and a Competing Risk Approach," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24699, European Association of Agricultural Economists.
    2. Vare, Minna & Weiss, Christoph R. & Pietola, Kyosti, 2005. "Should One Trust a Farmer's Succession Plan? Empirical Evidence on the Intention-Behaviour Discrepancy from Finland," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24622, European Association of Agricultural Economists.
    3. Glauben, Thomas & Tietje, Hendrik & Weiss, Christoph R., 2004. "Sussession In Agriculture: A Probit And Competing Risk Analysis," 2004 Annual meeting, August 1-4, Denver, CO 20067, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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    Keywords

    Farm Management;

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