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The effect of rental rates on the extension of Conservation Reserve Program contracts

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  • Cooper, Joseph C.
  • Osborn, Tim

Abstract

Given that the majority of conservation reserve program (CRP) contracts on approximately 36 million acres of enrolled land expire concurrently, re-enrollment decisions by farmers and the federal government have high budgetary implications. Using a survey of over 8,000 CRP contract holders, we apply an ordered response discrete choice model to explicitly model the range in rental rates over which the representative farmer may be ambivalent to renewing the CRP contract. Given the empirical results from the ordered response model, we estimate acreage re-enrollment as a function of the rental rate and compare them to results of a binomial choice model.

Suggested Citation

  • Cooper, Joseph C. & Osborn, Tim, 1998. "The effect of rental rates on the extension of Conservation Reserve Program contracts," MPRA Paper 24781, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:24781
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    References listed on IDEAS

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    3. Deacon, Robert T & Shapiro, Perry, 1975. "Private Preference for Collective Goods Revealed Through Voting on Referenda," American Economic Review, American Economic Association, vol. 65(5), pages 943-955, December.
    4. Krinsky, Itzhak & Robb, A Leslie, 1986. "On Approximating the Statistical Properties of Elasticities," The Review of Economics and Statistics, MIT Press, vol. 68(4), pages 715-719, November.
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    More about this item

    Keywords

    CRP contracts; ordered probit; re-enrollment; respondent indifference;
    All these keywords.

    JEL classification:

    • Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General

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