Challenging the Goldschmidt Theory of Rural Purchasing Patterns

This work uses unique data from three dairy dependent communities in rural Wisconsin to test established theory and empirical studies that link farm structure to local purchasing patterns and community economic development. A theoretical model of purchasing choices is developed to derive the determinants of local purchasing by dairy farms. This model is tested empirically using a double bounded Tobit model. The empirical estimations find little support for any linkage between farm size and local purchasing patterns across eleven major dairy farm inputs. The results do suggest that different community business characteristics (the supply side) and community attachment provide some explanations for diverse purchasing patterns.

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Working or Discussion Paper
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Staff Paper Series No. 475

 Record created 2017-04-01, last modified 2018-01-22

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