LIFETIME LEVERAGE CHOICE FOR PROPRIETARY FARMERS IN A DYNAMIC-STOCHASTIC ENVIRONMENT

Authors
COLLINS RA KARP LS
Citation
Ra. Collins et Ls. Karp, LIFETIME LEVERAGE CHOICE FOR PROPRIETARY FARMERS IN A DYNAMIC-STOCHASTIC ENVIRONMENT, Journal of agricultural and resource economics, 18(2), 1993, pp. 225-238
Citations number
10
Categorie Soggetti
Economics,"AgricultureEconomics & Policy
Journal title
Journal of agricultural and resource economics → ACNP
ISSN journal
10685502
Volume
18
Issue
2
Year of publication
1993
Pages
225 - 238
Database
ISI
SICI code
1068-5502(1993)18:2<225:LLCFPF>2.0.ZU;2-P
Abstract
This article reviews various models that may be used to explain optima l leverage choice for the proprietary farmer in a stochastic dynamic e nvironment and develops a new model that highlights the risk of failur e rather than the usual concept of risk as the variability of wealth. The model suggests that in addition to the usual factors, farm financi al leverage is affected by age, wealth, and the opportunity cost of fa rming.