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Development of Financial Relationships Within Farm Level Simulation Models
Author(s) -
Nutt Perry J.,
Skees Jerry R.
Publication year - 1990
Publication title -
applied economic perspectives and policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.4
H-Index - 49
eISSN - 2040-5804
pISSN - 2040-5790
DOI - 10.1093/aepp/12.1.1
Subject(s) - debt , equity (law) , economics , monte carlo method , debt to equity ratio , business , econometrics , finance , statistics , mathematics , population , demography , sociology , political science , law , nonprobability sampling
Monte Carlo simulation is used to examine the effects of various financial relationships upon the growth rate in equity for farms with different levels of debt. A method is proposed for establishing financial relationships whereby comparable growth rates for farms with different debt will occur. The results demonstrate that financial relationships are important when comparing farms with different debt and when developing inferences about policy alternatives at the farm level.