LIFETIME LEVERAGE CHOICE FOR PROPRIETARY FARMERS IN A DYNAMIC STOCHASTIC ENVIRONMENT

This article reviews various models that may be used to explain optimal leverage choice for the proprietary farmer in a stochastic dynamic environment and develops a new model that highlights the risk of failure rather than the usual concept of risk as the variability of wealth. The model suggests that in addition to the usual factors, farm financial leverage is affected by age, wealth, and the opportunity cost of farming.


Subject(s):
Issue Date:
1993-12
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/30962
Published in:
Journal of Agricultural and Resource Economics, Volume 18, Number 2
Page range:
225-238
Total Pages:
14




 Record created 2017-04-01, last modified 2017-08-24

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