Skip Navigation


European Review of Agricultural Economics Advance Access originally published online on April 9, 2009
European Review of Agricultural Economics 2009 36(1):103-120; doi:10.1093/erae/jbp010
This Article
Right arrow Full Text
Right arrow Full Text (PDF)
Right arrow All Versions of this Article:
36/1/103    most recent
jbp010v1
Right arrow Alert me when this article is cited
Right arrow Alert me if a correction is posted
Services
Right arrow Email this article to a friend
Right arrow Similar articles in this journal
Right arrow Alert me to new issues of the journal
Right arrow Add to My Personal Archive
Right arrow Download to citation manager
Right arrowRequest Permissions
Google Scholar
Right arrow Articles by Serra, T.
Right arrow Articles by Featherstone, A.
Right arrow Search for Related Content
Social Bookmarking
Add to CiteULike   Add to Connotea   Add to Del.icio.us  
What's this?

© Oxford University Press and Foundation for the European Review of Agricultural Economics 2009; all rights reserved. For permissions, please email journals.permissions@oxfordjournals.org

Investment rigidity and policy measures

Teresa Serraa, Spiro Stefanoub, José M. Gila and Allen Featherstonec

a Centre de Recerca en Economia i Desenvolupament Agroalimentari (CREDA-UPC-IRTA), Spain
b Pennsylvania State University, USA
c Kansas State University, USA

Corresponding author: José M. Gil, CREDA-UPC-IRTA, Parc Mediterrani de la Tecnologia. Edifici ESAB. Av. del Canal Olimpic, 15 08860 Castelldefels, Spain. E-mail: chema.gil{at}upc.edu

Received August 2008; final version received February 2009

This paper assesses the impacts of decoupled government transfers on production decisions of a sample of Kansas farms. Our empirical analysis is based on a reduced-form application of the dual model of investment under uncertainty developed by Sckokai, which is extended to a consideration of irregularities in the capital stock adjustment cost function. To do so we adopt the threshold regression methods proposed by Hansen. The econometric results support the existence of three regimes characterised by different economic behaviour. Our analysis suggests that in a dynamic setting that allows for irregularities in the capital adjustment cost function, decoupled transfers can have a powerful influence on production decisions. The dynamics of the stock of capital cause this influence to grow over time.

Keywords: Investment, decoupling, threshold behaviour

JEL classification: Q12, Q18


Add to CiteULike CiteULike   Add to Connotea Connotea   Add to Del.icio.us Del.icio.us    What's this?


This article has been cited by other articles:


Home page
 EUR REV AGRIC ECONHome page
P. Sckokai and D. Moro
Modelling the impact of the CAP Single Farm Payment on farm investment and output
Eur. Rev. Agric. Econ., November 5, 2009; (2009) jbp026v1.
[Abstract] [Full Text] [PDF]


Disclaimer: Please note that abstracts for content published before 1996 were created through digital scanning and may therefore not exactly replicate the text of the original print issues. All efforts have been made to ensure accuracy, but the Publisher will not be held responsible for any remaining inaccuracies. If you require any further clarification, please contact our Customer Services Department.