When to Replace Machinery Under Accelerated Deprecation Laws

Gregory A. Ibendahl and Jonathan Norvell

No 9351, 2005 Annual meeting, July 24-27, Providence, RI from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: The last several years have seen tax law changes that provide accelerated depreciation for farmers. The most recent tax law is the Job Creation and Worker Assistance Act of 2002. Accelerated depreciation laws seem to be designed to help stimulate the economy by encouraging farmers to purchase more machinery and to replace machinery more often. Farmers do benefit because lower taxes this year are probably better than lower taxes in future years (as long as marginal tax rates are the same). Less clear, however, is whether farmers should actually replace machinery more frequently. In other words, is the optimal lifespan of an asset reduced due to new. This paper tests for the optimal replacement age under conventional and accelerated deprecation laws and finds that accelerated deprecation laws appear to help farmers

Keywords: Farm; Management (search for similar items in EconPapers)
Pages: 11
Date: 2005
References: View references in EconPapers View complete reference list from CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea05:9351

DOI: 10.22004/ag.econ.9351

Access Statistics for this paper

More papers in 2005 Annual meeting, July 24-27, Providence, RI from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().