Farming Exit Decision by Age Group: Analysis of Tobacco Buyout Impact in Kentucky
17 Pages Posted: 19 May 2008
Date Written: April 2008
Abstract
The paper analyzes exit decision by tobacco farmers in the wake of tobacco buyout program in Kentucky. A data set collected through surveying Kentucky tobacco farmers is used to estimate a logit model representing the probability of exit as a function of farm-specific characteristics. The results indicate that decisions to stay or exit tobacco production are driven by different factors across age groups. In particular, the decisions of middle-age (46-64 years old) producers are found to be primarily affected by farm productivity factors, while the decisions of older (64+ years old) producers are much more sensitive to demographic and family characteristics, overall business climate and availability of alternative employment opportunities.
Keywords: exit decision, tobacco buyout, age groups
JEL Classification: J11, J14, J43
Suggested Citation: Suggested Citation