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Off-farm income and farm capital accumulation: a farm-level data analysis

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  • Lagerkvist, Carl Johan
  • Larsen, Karin
  • Olson, Kent D.

Abstract

This paper test farm households' joint decisions to work off-farm, and their investments in farm capital respectively, using a farm level data set involving 252 sole proprietorships in Southwestern Minnesota. Time series are collected from the period 1993 through 2002 and estimation is done using a recursive two-step simultaneous censored equations model. Strong support is found for endogeneity of farm capital in an off-farm reliance model as well as for of off-farm income reliance in a farm capital model. In addition, evidence of true state dependence in off-farm income reliance is supported by the data.

Suggested Citation

  • Lagerkvist, Carl Johan & Larsen, Karin & Olson, Kent D., 2006. "Off-farm income and farm capital accumulation: a farm-level data analysis," 2006 Annual meeting, July 23-26, Long Beach, CA 21480, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea06:21480
    DOI: 10.22004/ag.econ.21480
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