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Roche, Maurice J., Behan, Jasmina and McQuinn, Kieran (2003) Trees or Trotters? UNSPECIFIED. (Unpublished)
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Abstract
A real options model is used to explain why Irish farmers have been slow to switch from traditional farming to forestry despite numerous government incentives. In the theoretical model our results depend on profits from traditional farming relative to forestry. Under reasonable parameterisations of this profit ratio we show that it is optimal for farmers to stay in farming for six years before switching to forestry. In a subsequent empirical dynamic panel data model, the error correction model also predicts that it would take about six years for a change in the profit ratio to fully affect the number of hectares planted.
| Item Type: | Other |
|---|---|
| Additional Information: | N130/10/03 |
| Keywords: | error correction, forestry, panel data, real options |
| Academic Unit: | Faculty of Social Sciences > Economics, Finance and Accounting |
| Item ID: | 123 |
| Depositing User: | Ms Sandra Doherty |
| Date Deposited: | 04 Nov 2003 |
| Refereed: | No |
| URI: | https://mural.maynoothuniversity.ie/id/eprint/123 |
| Use Licence: | This item is available under a Creative Commons Attribution Non Commercial Share Alike Licence (CC BY-NC-SA). Details of this licence are available here |
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