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Off-Farm Work and On-Farm Investment

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  • Foltz, Jeremy D.
  • Aldana, Ursula

Abstract

This work has developed a theoretically consistent model of a farm household's choice between working on-farm and working off-farm and the effects of that choice on farm investment choices. The theory demonstrates the potential for wages driven by local economic conditions to be more important to dairy farm investment decisions than characteristics of dairy farms and farmers. The switching regression model developed from the theory is then tested with data from a representative sample of Wisconsin dairy farms. The econometric results demonstrate the importance of wages to farm investment decisions.

Suggested Citation

  • Foltz, Jeremy D. & Aldana, Ursula, 2006. "Off-Farm Work and On-Farm Investment," 2006 Annual meeting, July 23-26, Long Beach, CA 21185, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea06:21185
    DOI: 10.22004/ag.econ.21185
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    References listed on IDEAS

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    1. Chul‐Woo Kwon & Peter F. Orazem & Daniel M. Otto, 2006. "Off‐farm labor supply responses to permanent and transitory farm income," Agricultural Economics, International Association of Agricultural Economists, vol. 34(1), pages 59-67, January.
    2. Ahituv, Avner & Kimhi, Ayal, 2002. "Off-farm work and capital accumulation decisions of farmers over the life-cycle: the role of heterogeneity and state dependence," Journal of Development Economics, Elsevier, vol. 68(2), pages 329-353, August.
    3. Jeremy D. Foltz, 2004. "Entry, Exit, and Farm Size: Assessing an Experiment in Dairy Price Policy," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(3), pages 594-604.
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    Cited by:

    1. Ji, Yueqing & Yu, Xiaohua & Zhong, Funing, 2012. "Machinery investment decision and off-farm employment in rural China," China Economic Review, Elsevier, vol. 23(1), pages 71-80.
    2. Kramer, Benedikt & Schorr, Anke & Doluschitz, Reiner & Lips, Markus, 2018. "Wahrscheinlichkeit Von Investitionen In Milchviehställe Schweizer Verkehrsmilchbetriebe," 58th Annual Conference, Kiel, Germany, September 12-14, 2018 275845, German Association of Agricultural Economists (GEWISOLA).
    3. Benedikt Kramer & Anke Schorr & Reiner Doluschitz & Markus Lips, 2019. "Survival Analysis for the Adjustment Phase Following Investment in Swiss Dairy Sheds," Agriculture, MDPI, vol. 9(11), pages 1-8, November.

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