When to Get In and Out of Dairy Farming: A Real Option Analysis

Loren Tauer

Finance from University Library of Munich, Germany

Abstract: The Dixit entry/exit real option model, modified to accommodate a milk price support regime, was applied to the entry/exit decisions of New York dairy farmers. Results varied by farm size, but for the 500-cow farm the entry milk price is $19.09 and the exit milk price is $11.66 when farmers were allowed to continuously enter and exit the industry. With no option to ever return to dairy farming, the exit milk price falls to $10.00.

JEL-codes: G (search for similar items in EconPapers)
Date: 2005-04-23
New Economics Papers: this item is included in nep-agr and nep-cfn
Note: Type of Document - pdf
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https://econwpa.ub.uni-muenchen.de/econ-wp/fin/papers/0504/0504018.pdf (application/pdf)

Related works:
Journal Article: When to Get In and Out of Dairy Farming: A Real Option Analysis (2006)
Journal Article: When to Get In and Out of Dairy Farming: A Real Option Analysis (2006)
Working Paper: When to Get In and Out of Dairy Farming: A Real Option Analysis (2006)
Working Paper: When to Get In and Out of Dairy Farming: A Real Option Analysis (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpfi:0504018

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