This study answers how profitability changes from a lender and borrower perspective. Using the FBFM data for periods from 1995 to 2004, we find that the variables that explain the profitability of a lender and borrower differ. Further, doing the regression according to categories, gives us...

In the paper, an econometric model is proposed to test the risk balancing hypothesis using farm level data. For the purpose, a constraint on expected utility maximization with respect to farm financial structure is given. Cluster method is applied to pick out the farms on the efficient frontier...

This study examines the impact of farmland investments on the risk-efficiency of mixed asset portfolios. Traditional asset classes considered available for investment include various equity market indices, commercial REITs, corporate bonds of investment- and sub investment grade, government...

The study addresses problems in measuring credit risk under the structure model, and then proposes a seemingly unrelated regression model (SUR) to predict farms’ ability in meeting their current and anticipated obligations in the next 12 months. The empirical model accounts for both the...

This paper introduces two continuous time models, i.e. time homogenous and non-homogenous Markov chain models, for analyzing farm credit migration as alternatives to the traditional discrete time model cohort method. Results illustrate that the two continuous time models provide more detailed,...

This study provides farm-level empirical support to the Risk-Balancing Hypothesis using Illinois grain farm data. The econometric results indicate that risk-balancing farmers comprise more than half of the sample. These farmers tend to be older, have higher leasing ratios, are less financially...

Non-risk factors primarily determine the probability of paying positive premiums to landowners for bearing greater risk under crop share versus cash leasing arrangements. The trends toward higher cash rent levels on larger farms may indicate that higher cash rent is a bidding strategy to control...

The effect of risk on farmland values and returns is analyzed using a capitalization model. County-level models are estimated using spatial econometric techniques. Our results show that riskier regions and growing conditions have both lower land values and higher risk-adjusted rates of return to...

While traditional finance theory suggests that leasing and debt are substitutes, some papers demonstrated the theoretical possibility of complementarity. Empirical studies indicate that both are possible. In this paper we will use the Tobit model, ordinary least squares and quantile regression...

Using longitudinal panel farm-level data, this study finds that income variability may be materially influenced by farm size. Econometric results suggest that policy analyses and other considerations of the distributional effects of, and response to, income variability for commercial scale...