Application of Multivariate Probit to a Threshold Model of Grain Dryer Purchasing Decisions

Lowell Hill and Paul Kau

American Journal of Agricultural Economics, 1973, vol. 55, issue 1, 19-27

Abstract: Purchase of grain dryers by farmers can be explained using a threshold theory of decision in which a reaction occurs only after the strength of the stimuli increases beyond the farmers' reaction threshold. Estimates of the causal relationships in this dichotomous decision model were obtained by using the probit technique with data from a farmer panel. The results provide an explanation of differences in the number of dryers purchased by farmers in various classes and regions. It also provides a procedure for predicting dryer ownership and purchases of dryers as an aid to forward planning by distributors of drying equipment.

Date: 1973
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