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Using the logit model with aggregated choice data in estimation of Iowa corn farmers’ conservation tillage subsidies

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  • Wade, Tara
  • Kurkalova, Lyubov A.
  • Secchi, Silvia

Abstract

This study estimates the costs of adoption of conservation tillage by Iowa corn farmers by utilizing the method of empirical estimation of a logit model that incorporates the full information on the attributes of agents and county aggregated measures of agents’ choices. The methodology treats the aggregated data as an expected value—the area-weighted group average of individual probabilities of choosing conservation tillage—subject to a measurement error. Using the 2002 and 2004 county-average conservation tillage choice data, we estimate field level costs of the adoption of conservation tillage and predict that the sample average subsidy payment required to entice farmers to use conservation tillage is $17.65/acre. The results indicate that conservation tillage adoption is significantly affected by soil characteristics, crop choice and high net returns using conventional tillage methods.

Suggested Citation

  • Wade, Tara & Kurkalova, Lyubov A. & Secchi, Silvia, 2012. "Using the logit model with aggregated choice data in estimation of Iowa corn farmers’ conservation tillage subsidies," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124974, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea12:124974
    DOI: 10.22004/ag.econ.124974
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