Publication Date:
2015-07-10
Description:
We argue that farm survival is influenced by neighboring farmers’ characteristics and, in particular, by the direct payments neighboring farmers receive. The article shows empirically that these interdependencies are crucial for an assessment of the effects of direct payments on farm survival. Using spatially explicit farm-level data for nearly all Norwegian farms, a spatial probit model is estimated to explain farm survival from 1999 to 2009 controlling for spatial farm interdependence. We show that ignoring spatial interdependencies between farms leads to a substantial overestimation of the effects of direct payments on farm survival. To our knowledge, this article is the first attempt to empirically analyze the importance of neighboring interdependencies for the effects of direct payments on farm survival.
Keywords:
C21 - Cross-Sectional Models
;
Spatial Models
;
Treatment Effect Models, C25 - Discrete Regression and Qualitative Choice Models, Q12 - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets, Q13 - Agricultural Markets and Marketing
;
Cooperatives
;
Agribusiness
Print ISSN:
0002-9092
Electronic ISSN:
1467-8276
Topics:
Agriculture, Forestry, Horticulture, Fishery, Domestic Science, Nutrition
,
Economics
