IDEAS home Printed from https://ideas.repec.org/p/ags/aaea05/19480.html
   My bibliography  Save this paper

Off-farm Income and Risky Investments: What Happens to Farm and Nonfarm Assets?

Author

Listed:
  • Andersson, Hans
  • Ramaswami, Bharat
  • Moss, Charles B.
  • Erickson, Kenneth W.
  • Hallahan, Charles B.
  • Nehring, Richard F.

Abstract

Off-farm work improves and reduces the riskiness of household income. Theoretical analyses reveal that the level and riskiness of off-farm income affect demand for farm/nonfarm investments. A two-limit Tobit model is estimated using ARMS data for 1996-2003. The impact on investment behaviour is evaluated.

Suggested Citation

  • Andersson, Hans & Ramaswami, Bharat & Moss, Charles B. & Erickson, Kenneth W. & Hallahan, Charles B. & Nehring, Richard F., 2005. "Off-farm Income and Risky Investments: What Happens to Farm and Nonfarm Assets?," 2005 Annual meeting, July 24-27, Providence, RI 19480, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea05:19480
    DOI: 10.22004/ag.econ.19480
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/19480/files/sp05an03.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.19480?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Hoppe, Robert A. & MacDonald, James M., 2001. "America's Diverse Family Farms: Assorted Sizes, Types, and Situations," Agricultural Information Bulletins 33767, United States Department of Agriculture, Economic Research Service.
    2. Verbeek, Marno & Nijman, Theo, 1992. "Can Cohort Data Be Treated as Genuine Panel Data?," Empirical Economics, Springer, vol. 17(1), pages 9-23.
    3. Huffman, Wallace E., 1991. "Agricultural Household Models: Survey and Critique," Staff General Research Papers Archive 11008, Iowa State University, Department of Economics.
    4. 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.
    5. McNamara, Kevin T. & Weiss, Christoph R., 2001. "On- And Off-Farm Diversification," 2001 Annual meeting, August 5-8, Chicago, IL 20520, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    6. Christoph R. Weiss, 1999. "Farm Growth and Survival: Econometric Evidence for Individual Farms in Upper Austria," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(1), pages 103-116.
    7. Scott H. Irwin & D. Lynn Forster & Bruce J. Sherrick, 1988. "Returns to Farm Real Estate Revisited," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 70(3), pages 580-587.
    8. Andersson, Hans & Ramamurtie, Sailesh & Ramaswami, Bharat, 2003. "Labor income and risky investments: can part-time farmers compete?," Journal of Economic Behavior & Organization, Elsevier, vol. 50(4), pages 477-493, April.
    9. Teresa Serra & Barry K. Goodwin & Allen M. Featherstone, 2004. "Determinants of investments in non‐farm assets by farm households," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 64(1), pages 17-32, May.
    10. Stefan Hochguertel & Rob Alessie & Arthur Van Soest, 1997. "Saving Accounts versus Stocks and Bonds in Household Portfolio Allocation," Scandinavian Journal of Economics, Wiley Blackwell, vol. 99(1), pages 81-97, March.
    11. Almas Heshmati & Subal C. Kumbhakar, 1997. "Estimation Of Technical Efficiency In Swedish Crop Farms: A Pseudo Panel Data Approach," Journal of Agricultural Economics, Wiley Blackwell, vol. 48(1‐3), pages 22-37, January.
    12. Guiso, Luigi & Jappelli, Tullio & Terlizzese, Daniele, 1996. "Income Risk, Borrowing Constraints, and Portfolio Choice," American Economic Review, American Economic Association, vol. 86(1), pages 158-172, March.
    13. John B. Penson, 1972. "Demand for Financial Assets in the Farm Sector: A Portfolio Balance Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 54(2), pages 163-174.
    14. John R. Fiske & Marvin T. Batte & Warren F. Lee, 1986. "Nonfarm Equity in Agriculture: Past, Present, and Future," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 68(5), pages 1319-1323.
    15. Deaton, Angus, 1985. "Panel data from time series of cross-sections," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 109-126.
    16. Ashok K. Mishra & Mitchell J. Morehart, 2001. "Off‐farm investment of farm households: A logit analysis," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 61(1), pages 88-101, May.
    17. Luigi Guiso & Tullio Jappelli, 2000. "Household Portfolios in Italy," CSEF Working Papers 43, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    18. Teresa Serra & Barry K. Goodwin & Allen M. Featherstone, 2005. "Agricultural Policy Reform and Off‐farm Labour Decisions," Journal of Agricultural Economics, Wiley Blackwell, vol. 56(2), pages 271-285, July.
    19. Mario F. Crisostomo & Allen M. Featherstone, 1990. "A Portfolio Analysis of Returns to Farm Equity and Assets," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 12(1), pages 9-21.
    20. Cochrane, Willard W., 1987. "Saving the Modest-Sized Farm Or, The Case For Part-Time Farming," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 2(2), pages 1-4.
    21. Verbeek, M.J.C.M. & Nijman, T.E., 1992. "Can cohort data be treated as genuine panel data?," Other publications TiSEM d4eada8f-b91c-4fe7-a58c-7, Tilburg University, School of Economics and Management.
    22. Weiss, Christoph R, 1997. "Do They Come Back Again? The Symmetry and Reversibility of Off-Farm Employment," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 24(1), pages 65-84.
    23. Gardner, Bruce L, 1992. "Changing Economic Perspectives on the Farm Problem," Journal of Economic Literature, American Economic Association, vol. 30(1), pages 62-101, March.
    24. Schmitt, Gunther, 1989. "Farms, Farm Households, and Productivity of Resource Use in Agriculture," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 16(2), pages 257-284.
    25. Ayal Kimhi & Eliel Rapaport, 2004. "Time Allocation between Farm and Off-Farm Activities in Israeli Farm Households," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(3), pages 716-721.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Thia Hennessy & Mark O’ Brien, 2007. "Is off-farm income driving on-farm investment?," Working Papers 0704, Rural Economy and Development Programme,Teagasc.
    2. Viaggi, Davide & Raggi, Meri & Gomez y Paloma, Sergio, 2009. "Facing decoupling: use of payments and investment reaction to decoupling in the EU," 2009 Conference, August 16-22, 2009, Beijing, China 51724, International Association of Agricultural Economists.
    3. Lefebvre, Marianne & Gomez y Paloma, Sergio & Viaggi, Davide, 2014. "EU farmers' intentions to invest in 2014-2020: complementarity between asset classes," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182737, European Association of Agricultural Economists.
    4. Ciaian, Pavel & Espinosa, Maria & Louhichi, Kamel & Perni, Angel & Gomez y Paloma, Sergio, 2018. "Farm level impacts of abolishing the CAP direct payments: An assessment using the IFM-CAP model," 162nd Seminar, April 26-27, 2018, Budapest, Hungary 272087, European Association of Agricultural Economists.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Davies, Stephen P. & Erickson, Kenneth W. & Vickner, Steven S. & Hoag, Dana L. & Nehring, Richard F., 2005. "An Error-Components Three-Stage Least-Squares Model of Investment Allocation by Farm Households," 2005 Annual meeting, July 24-27, Providence, RI 19249, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Harris, James Michael & Blank, Steven C. & Erickson, Kenneth W. & Hallahan, Charles B., 2010. "Off-farm Income and Investments in Farm Assets: A Double Hurdle Approach," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 61531, Agricultural and Applied Economics Association.
    3. Blank, Steven C., 2005. "Hedging with off-farm income: implications for production and investment decisions across farm sizes," 2005 Annual Meeting, July 6-8, 2005, San Francisco, California 291741, Western Agricultural Economics Association.
    4. Lien, Gudbrand D. & Kumbhakar, Subal C. & Hardaker, J. Brian, 2008. "Determinants Of Part-Time Farming And Its Effect On Farm Productivity And Efficiency," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6701, European Association of Agricultural Economists.
    5. Andersson, Hans & Ramamurtie, Sailesh & Ramaswami, Bharat, 2003. "Labor income and risky investments: can part-time farmers compete?," Journal of Economic Behavior & Organization, Elsevier, vol. 50(4), pages 477-493, April.
    6. Corsi, Alessandro & Salvioni, Cristina, 2017. "Once part-timer always part-timer? Causes for persistence in off farm work state of farmers," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 6(2), September.
    7. Paul, Catherine J. Morrison & Nehring, Richard, 2005. "Product diversification, production systems, and economic performance in U.S. agricultural production," Journal of Econometrics, Elsevier, vol. 126(2), pages 525-548, June.
    8. Rumman Khan, 2018. "Assessing cohort aggregation to minimise bias in pseudo-panels," Discussion Papers 2018-01, University of Nottingham, CREDIT.
    9. Kanang Amos Akims & Perez Ayieko Onono & Dianah Mukwate Ngui, . "Trade Liberalization and Productivity in the Nigerian Manufacturing Sector," Journal of Economic and Sustainable Growth 3, Office Of The Chief Economist, Development Bank of Nigeria.
    10. Fernandez-Cornejo, Jorge & Mishra, Ashok K. & Nehring, Richard F. & Hendricks, Chad & Southern, Malaya & Gregory, Alexandra, 2007. "Off-Farm Income, Technology Adoption, And Farm Economic Performance," Economic Research Report 7234, United States Department of Agriculture, Economic Research Service.
    11. Corsi, A. & Salvioni, C., 2013. "Off-farm labour participation of Italian farmers, state dependence and the CAP reform," 2013 Second Congress, June 6-7, 2013, Parma, Italy 149886, Italian Association of Agricultural and Applied Economics (AIEAA).
    12. Teresa Serra & Barry K. Goodwin & Allen M. Featherstone, 2004. "Determinants of investments in non‐farm assets by farm households," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 64(1), pages 17-32, May.
    13. Heshmati, Almas & Khayyat, Nabaz T., 2011. "Statistical Analysis of Landmine Fatalities in Kurdistan," IZA Discussion Papers 6018, Institute of Labor Economics (IZA).
    14. Catherine Paul & Richard Nehring & David Banker & Agapi Somwaru, 2004. "Scale Economies and Efficiency in U.S. Agriculture: Are Traditional Farms History?," Journal of Productivity Analysis, Springer, vol. 22(3), pages 185-205, November.
    15. Chang, Yang-Ming & Huang, Biing-Wen & Chen, Yun-Ju, 2012. "Labor supply, income, and welfare of the farm household," Labour Economics, Elsevier, vol. 19(3), pages 427-437.
    16. Elias Giannakis & Sophia Efstratoglou & Artemis Antoniades, 2018. "Off-Farm Employment and Economic Crisis: Evidence from Cyprus," Agriculture, MDPI, vol. 8(3), pages 1-11, March.
    17. Kasraian, Dena & Maat, Kees & van Wee, Bert, 2018. "Urban developments and daily travel distances: Fixed, random and hybrid effects models using a Dutch pseudo-panel over three decades," Journal of Transport Geography, Elsevier, vol. 72(C), pages 228-236.
    18. Verbeek, Marno & Vella, Francis, 2005. "Estimating dynamic models from repeated cross-sections," Journal of Econometrics, Elsevier, vol. 127(1), pages 83-102, July.
    19. Katsushi S. Imai & Takahiro Sato, 2014. "Recent Changes in Micro-Level Determinants of Fertility in India: Evidence from National Family Health Survey Data," Oxford Development Studies, Taylor & Francis Journals, vol. 42(1), pages 65-85, March.
    20. Sarah Bridges & Simona Mateut, 2009. "Attitudes towards immigration in Europe," Working Papers 2009008, The University of Sheffield, Department of Economics, revised May 2009.

    More about this item

    Keywords

    Farm Management;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:aaea05:19480. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/aaeaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.