The irrelevance of stated plans in predicting farm successions in Finland

Authors

• Minna Väre MTT Agrifood Research Finland, Economic Research, Luutnantintie 13, FI-00410 Helsinki, Finland
• Kyösti Pietola MTT Agrifood Research Finland, Economic Research, Luutnantintie 13, FI-00410 Helsinki, Finland
• Christoph R. Weiss Vienna University of Economics and Business Administration

DOI: https://doi.org/10.2137/145960610791015041

Keywords:

farm succession, retirement, stated plan, recursive probi

Abstract

This study estimates the value of farmers stated succession plans in predicting revealed succession decisions. The stated succession plan exists when a farmer answers in a survey questionnaire that the farm is going to be transferred to a new entrant within a five year period. The succession is revealed when the farm is transferred to a successor. The stated and revealed behaviour is estimated as a recursive Binomial-Probit- Model, which accounts for censoring of the decision variables and controls for a potential correlation between the estimating equations. The results suggest that the succession plans, as stated by elderly farmers in the questionnaires, do not provide information that is significant and valuable in predicting the true, revealed successions, once certain farm and farmer characteristics are controlled for.;