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The Farm Diversification Discount
Ani L. Katchova
American Journal of Agricultural Economics
Vol. 87, No. 4 (Nov., 2005), pp. 984-994
Stable URL: http://www.jstor.org/stable/3697784
Page Count: 11
You can always find the topics here!Topics: Farms, Crops, Farm commodities, Portfolio diversification, Livestock farms, Crop diversification, Commodities, Crop value, Crop production, Farm economics
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This article estimates the effect of diversification on farm values, where farms are valued relative to the median specialized farm having the same enterprise. Using data from the Agricultural Resource Management Study, the estimated diversification discount in agriculture is similar to the discount found for corporate firms. The results show that diversified crop/livestock farms had a diversification discount of 5.8% in comparison with specialized crop or livestock farms from 1999 to 2001. Commodity diversified farms had a diversification discount of 9.4% in comparison with commodity specialized farms.
American Journal of Agricultural Economics © 2005 Agricultural & Applied Economics Association