Okonomische Hysterese in der Veredlungsproduktion

German hog production responds only very limited to price fluctuations in the pork market. The hog production concentrates in a few regions though it does not depend on special natural conditions. Furthermore, the production volume does hardly vary over time. Relatively high market risks, sunk costs, and the flexibility of the decision maker to defer investments characterize decision problems hog production. Thus the real option approach is chosen to explain the inertia in production capacity. Using panel data of specialised hog farms from the German farm accountancy data network (FADN) an empirical investment model is estimated. Formally, the model has the structure of an ordered probit model. This approach allows to test for economic hysteresis in the adjustment of hog production capacity. The results confirm that uncertainty and flexibility widen the optimal range of inaction.


Other Titles:
Economic Hysteresis in Hog Production
Issue Date:
2005
Publication Type:
Working or Discussion Paper
DOI and Other Identifiers:
Record Identifier:
https://ageconsearch.umn.edu/record/18813
PURL Identifier:
http://purl.umn.edu/18813
Total Pages:
29

Fulltext:
Download fulltext
PDF

Rate this document:

Rate this document:
1
2
3
 
(Not yet reviewed)