Template-Type: ReDIF-Paper 1.0
Author-Name:  Søren Arnberg
Author-Name-First: Søren
Author-Name-Last: Arnberg
Author-Email: sar@dors.dk
Author-Workplace-Name: Danish Economic Counsils
Author-Name:  Lars Gårn Hansen
Author-Name-First: Lars Gårn
Author-Name-Last: Hansen
Author-Email:  lgh@foi.dk
Author-Workplace-Name: Institute of Food and Resource Economics, University of Copenhagen
Title:  The Dynamics of Farm Land Allocation – Short and Long Run Reactions in a Long Micro Panel
Abstract:  This study develops a dynamic multi-output model of farmers’ crop allocation decisions that allows
estimation of both short-run and long-run adjustments to a wide array of economic incentives. The
method can be used to inform decision-makers about a number of issues including agricultural
policy reform and environmental regulation. The model allows estimation of dynamic effects
relating to price expectations adjustment, investment lags and crop rotation constraints. Estimation
is based on micro-panel data from Danish farmers that includes acreage, output and variable input
utilisation at the crop level. Results indicate that there are substantial differences between the shortrun
and long-run land allocation behaviour of Danish farmers and that there are substantial
differences in the time lags associated with different crops. Since similar farming conditions are
found in northern Europe and parts of the USA and Canada, this result may have more general
interest.
Length:  28 pages
Creation-Date:  2010-05
File-URL: http://okonomi.foi.dk/workingpapers/WPpdf/WP2010/WP_2010_03_dynamics_farm_land_allocation.pdf
File-Format: Application/pdf
Number: 2010/3
Classification-JEL: C33, Q12, Q15
Keywords: land allocation, crop rotation, system of dynamic equations, micro panel data, GMM
Handle: RePEc:foi:wpaper:2010_03