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Using the logit model with aggregated choice data in estimation of Iowa corn farmers’ conservation tillage subsidies

  • Wade, Tara
  • Kurkalova, Lyubov A.
  • Secchi, Silvia

This study estimates the costs of adoption of conservation tillage by Iowa corn farmers by utilizing the method of empirical estimation of a logit model that incorporates the full information on the attributes of agents and county aggregated measures of agents’ choices. The methodology treats the aggregated data as an expected value—the area-weighted group average of individual probabilities of choosing conservation tillage—subject to a measurement error. Using the 2002 and 2004 county-average conservation tillage choice data, we estimate field level costs of the adoption of conservation tillage and predict that the sample average subsidy payment required to entice farmers to use conservation tillage is $17.65/acre. The results indicate that conservation tillage adoption is significantly affected by soil characteristics, crop choice and high net returns using conventional tillage methods.

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File URL: http://purl.umn.edu/124974
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Paper provided by Agricultural and Applied Economics Association in its series 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington with number 124974.

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Date of creation: 2012
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Handle: RePEc:ags:aaea12:124974
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  1. Kurkalova, Lyubov A. & Rabotyagov, Sergey S., 2006. "Estimation of a binary choice model with grouped choice data," Economics Letters, Elsevier, vol. 90(2), pages 170-175, February.
  2. Lyubov Kurkalova & Catherine Kling & Jinhua Zhao, 2006. "Green Subsidies in Agriculture: Estimating the Adoption Costs of Conservation Tillage from Observed Behavior," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 54(2), pages 247-267, 06.
  3. Daniel Hellerstein, 2005. "Modeling Discrete Choice with Uncertain Data: An Augmented MNL Estimator," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(1), pages 77-84.
  4. Howitt, Richard E. & Reynaud, Arnaud, 2002. "Spatial Disaggregation of Agricultural Production Data," 2002 International Congress, August 28-31, 2002, Zaragoza, Spain 24961, European Association of Agricultural Economists.
  5. Claassen, Roger & Cattaneo, Andrea & Johansson, Robert, 2008. "Cost-effective design of agri-environmental payment programs: U.S. experience in theory and practice," Ecological Economics, Elsevier, vol. 65(4), pages 737-752, May.
  6. Raja Chakir, 2009. "Spatial Downscaling of Agricultural Land-Use Data: An Econometric Approach Using Cross Entropy," Land Economics, University of Wisconsin Press, vol. 85(2), pages 238-251.
  7. You, Liangzhi & Wood, Stanley, 2006. "An entropy approach to spatial disaggregation of agricultural production," Agricultural Systems, Elsevier, vol. 90(1-3), pages 329-347, October.
  8. Cameron, Trudy Ann, 1988. "A new paradigm for valuing non-market goods using referendum data: Maximum likelihood estimation by censored logistic regression," Journal of Environmental Economics and Management, Elsevier, vol. 15(3), pages 355-379, September.
  9. Lambert, Dayton M. & Schaible, Glenn D. & Johansson, Robert C. & Daberkow, Stan G., 2006. "Working-Land Conservation Structures: Evidence on Program and Non-Program Participants," 2006 Annual meeting, July 23-26, Long Beach, CA 21438, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  10. Christine A. Ervin & David E. Ervin, 1982. "Factors Affecting the Use of Soil Conservation Practices: Hypotheses, Evidence, and Policy Implications," Land Economics, University of Wisconsin Press, vol. 58(3), pages 277-292.
  11. Secchi, Silvia & Kurkalova, Lyubov A. & Gassman, Philip W. & Hart, Chad E., 2011. "Land Use Change in a Biofuels Hotspot: The Case of Iowa, Usa," Staff General Research Papers 32452, Iowa State University, Department of Economics.
  12. JunJie Wu & Richard M. Adams & Catherine L. Kling & Katsuya Tanaka, 2004. "From Microlevel Decisions to Landscape Changes: An Assessment of Agricultural Conservation Policies," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(1), pages 26-41.
  13. Lyubov A. Kurkalova & Catherine L. Kling & Jinhua Zhao, 2003. "Green Subsidies in Agriculture: Estimating the Adoption Costs of Conservation Tillage from Observed Behavior (Revised)," Center for Agricultural and Rural Development (CARD) Publications 01-wp286, Center for Agricultural and Rural Development (CARD) at Iowa State University.
  14. Westra, John V. & Olson, Kent D., 1997. "Farmers' Decision Processes And Adoption Of Conservation Tillage," Staff Papers 13380, University of Minnesota, Department of Applied Economics.
  15. Brian W. Gould & William E. Saupe & Richard M. Klemme, 1989. "Conservation Tillage: The Role of Farm and Operator Characteristics and the Perception of Soil Erosion," Land Economics, University of Wisconsin Press, vol. 65(2), pages 167-185.
  16. Meredith J. Soule & Abebayehu Tegene & Keith D. Wiebe, 2000. "Land Tenure and the Adoption of Conservation Practices," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(4), pages 993-1005.
  17. Horowitz, John K. & Ebel, Robert M. & Ueda, Kohei, 2010. ""No-Till" Farming Is a Growing Practice," Economic Information Bulletin 96636, United States Department of Agriculture, Economic Research Service.
  18. Claassen, Roger & Morehart, Mitchell J., 2009. "Agricultural Land Tenure and Carbon Offsets," Economic Brief 58994, United States Department of Agriculture, Economic Research Service.
  19. Robert J. Sheeder & Gary D. Lynne, 2011. "Empathy-Conditioned Conservation: “Walking in the Shoes of Others” as a Conservation Farmer," Land Economics, University of Wisconsin Press, vol. 87(3), pages 433-452.
  20. Roger Claassen & Richard E. Just, 2010. "Heterogeneity and Distributional Form of Farm-Level Yields," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 93(1), pages 144-160.
  21. Malcolm, Scott A. & Aillery, Marcel P., 2009. "Growing Crops for Biofuels has Spillover Effects," Amber Waves, United States Department of Agriculture, Economic Research Service, March.
  22. Ding, Ya & Schoengold, Karina & Tadesse, Tsegaye, 2009. "The Impact of Weather Extremes on Agricultural Production Methods: Does Drought Increase Adoption of Conservation Tillage Practices?," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 34(3), December.
  23. John D. McClelland & John K. Horowitz, 1999. "The Costs of Water Pollution Regulation in the Pulp and Paper Industry," Land Economics, University of Wisconsin Press, vol. 75(2), pages 220-232.
  24. Fuglie, Keith O., 1999. "Conservation Tillage And Pesticide Use In The Cornbelt," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 31(01), April.
  25. Douglas J. Miller & Andrew J. Plantinga, 1999. "Modeling Land Use Decisions with Aggregate Data," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(1), pages 180-194.
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