The Farm Diversification Discount

Ani Katchova

American Journal of Agricultural Economics, 2005, vol. 87, issue 4, 984-994

Abstract: 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. Copyright 2005, Oxford University Press.

Date: 2005
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Working Paper: THE FARM DIVERSIFICATION DISCOUNT (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:oup:ajagec:v:87:y:2005:i:4:p:984-994

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