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Heterogeneous impacts of neighbouring farm size on the decision to exit: evidence from Brittany

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  • Legrand D F Saint-Cyr
  • Hugo Storm
  • Thomas Heckelei
  • Laurent Piet

Abstract

Accounting for spatial interactions between farms is highly relevant for the analysis of agricultural policy impacts. Existing studies, however, only account for homogeneous (average) spatial interactions. We develop a mixture modelling framework to account for unobserved heterogeneity, allowing spatial interaction to vary across endogenously defined farm types. We apply this approach to study farmer decisions to exit the farming business using a large panel dataset covering all registered farms in Brittany, France, for the period 2004–2014. While exiting is on average positively correlated with neighbouring farm size, we find substantial variation between farm types, and a negative correlation for a significant proportion of farms. The approach we develop not only enables us to identify different correlations between neighbouring farm size and exits from farming but also yields different results than pooled estimations.

Suggested Citation

  • Legrand D F Saint-Cyr & Hugo Storm & Thomas Heckelei & Laurent Piet, 2019. "Heterogeneous impacts of neighbouring farm size on the decision to exit: evidence from Brittany," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 46(2), pages 237-266.
    • Handle: RePEc:oup:erevae:v:46:y:2019:i:2:p:237-266.
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    File URL: http://hdl.handle.net/10.1093/erae/jby029
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    Citations

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    Cited by:

    1. Zorn, Alexander & Zimmert, Franziska, 2020. "Structural adjustment of Swiss dairy farms - farm exit and farm type change," 60th Annual Conference, Halle/ Saale, Germany, September 23-25, 2020 305605, German Association of Agricultural Economists (GEWISOLA).
    2. Plogmann, Jana & Mußhoff, Oliver & Odening, Martin & Ritter, Matthias, 2022. "Farmland sales under returns and price uncertainty," Economic Modelling, Elsevier, vol. 117(C).
    3. Marlene Kionka & Martin Odening & Jana Plogmann & Matthias Ritter, 2021. "Measuring liquidity in agricultural land markets," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 82(4), pages 690-713, September.
    4. Alexander Zorn & Franziska Zimmert, 2022. "Structural change in the dairy sector: exit from farming and farm type change," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 10(1), pages 1-31, December.
    5. Sebastian Neuenfeldt & Alexander Gocht & Thomas Heckelei & Klaus Mittenzwei & Pavel Ciaian, 2021. "Using Aggregated Farm Location Information to Predict Regional Structural Change of Farm Specialisation, Size and Exit/Entry in Norway Agriculture," Agriculture, MDPI, vol. 11(7), pages 1-22, July.
    6. Subal C. Kumbhakar & Jingfang Zhang & Gudbrand Lien, 2023. "Locationally Varying Production Technology and Productivity: The Case of Norwegian Farming," Econometrics, MDPI, vol. 11(3), pages 1-20, August.
    7. Plogmann, Jana & Mußhoff, Oliver & Odening, Martin & Ritter, Matthias, 2022. "Farm growth and land concentration," Land Use Policy, Elsevier, vol. 115(C).
    8. Vroege, Willemijn & Meraner, Manuela & Polman, Nico & Storm, Hugo & Heijman, Wim & Finger, Robert, 2020. "Beyond the single farm – A spatial econometric analysis of spill-overs in farm diversification in the Netherlands," Land Use Policy, Elsevier, vol. 99(C).
    9. Zorn, Alexander & Zimmert, Franziska, 2020. "Structural adjustment of Swiss dairy farms - farm exit and farm type change," 60th Annual Conference, Halle/ Saale, Germany, September 23-25, 2020 305605, German Association of Agricultural Economists (GEWISOLA).
    10. Franziska Appel & Alfons Balmann, 2023. "Predator or prey? Effects of farm growth on neighbouring farms," Journal of Agricultural Economics, Wiley Blackwell, vol. 74(1), pages 214-236, February.
    11. Steinhübel, Linda & Wegmann, Johannes & Jose, Monish, 2022. "Neighborhood effects, urbanization, and agricultural commercialization in South India," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322143, Agricultural and Applied Economics Association.
    12. Emmanuel Paroissien & Laure Latruffe & Laurent Piet, 2021. "Early exit from business, performance and neighbours’ influence: a study of farmers in France [Effects of differing farm policies on farm structure and dynamics]," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 48(5), pages 1132-1161.
    13. Loic Levi & Obafemi Philippe Koutchade & Laure Latruffe & Aude Ridier, 2018. "Spatial effects in investment decisions: Evidence from French dairy farms," Post-Print hal-02024077, HAL.

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