[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/oup/ajagec/v70y1988i3p572-579..html
   My bibliography  Save this article

The Theoretical Effects of Farm Policies on Optimal Leverage and the Probability of Equity Losses

Author

Listed:
  • Allen M. Featherstone
  • Charles B. Moss
  • Timothy G. Baker
  • Paul V. Preckel
Abstract
The degree to which the use of debt is increased in response to risk-reducing and income-augmenting farm policies is studied theoretically. A mean-variance model is used to determine the optimal leverage adjustment, then the effects of policies on the cumulative probability of earning very low rates of return on equity are examined. The evidence suggests that farm policies induce a large enough increase in financial leverage to increase the probability of farmers having negative returns to equity.

Suggested Citation

  • Allen M. Featherstone & Charles B. Moss & Timothy G. Baker & Paul V. Preckel, 1988. "The Theoretical Effects of Farm Policies on Optimal Leverage and the Probability of Equity Losses," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 70(3), pages 572-579.
    • Handle: RePEc:oup:ajagec:v:70:y:1988:i:3:p:572-579.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.2307/1241495
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:ajagec:v:70:y:1988:i:3:p:572-579.. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://edirc.repec.org/data/aaeaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.