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Comparative Analysis of Investment Models for New York Dairy Farms
Author(s) -
Weersink Alfons J.,
Tauer Loren W.
Publication year - 1989
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1241782
Subject(s) - investment (military) , economics , capital investment , stock (firearms) , econometrics , capital (architecture) , fixed investment , aggregate (composite) , capital expenditure , aggregate data , microeconomics , capital formation , finance , financial capital , mathematics , statistics , engineering , geography , mechanical engineering , profit (economics) , materials science , archaeology , politics , political science , law , composite material
Traditional and dynamic investment models were estimated using farm‐level dairy data. The traditional model predicted more variability in desired capital and less variability in the adjustment rate than did the dynamic model. Overall the traditional model performed better. Both models suggest a significant delay between changes in the determinants of desired capital stock and the actual investment expenditure. New York dairy farmers may be making more extensive use of existing capital before making additional expenditures. Another explanation may be our use of farm‐level data where investment is periodic and discrete. Most other studies have used aggregate data.