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This study aims at investigating the impact of agricultural policies on structural changeprocess in the French farming sector. As farms may behave differently, a mixture modeling approach is applied in order to account for unobserved farm heterogeneity. A multinomial logit specification is used for the transition probabilities and the parameters of the model are estimated by maximum likelihood method using the expectation-maximization (EM) algorithm. An empirical application to an unbalanced panel over 2000-2013 shows that the French farming sector consists of a mixture of two types of farms with transition processes very different. The results also show that the impact of subsidies from the Firstand the Second Pillars of the Common Agricultural policy (CAP) depends on the typemembership of farms. I thus argued that agricultural policy assessment should pay more attention on potential unobserved heterogeneity in farms’ behavior.

Keywords: Agricultural policy ; EM algorithm ; Farm structural change ; Mixed Markov model ; Unobserved heterogeneity

Subject(s): Agricultural and Food Policy

Farm Management

Research Methods/ Statistical Methods

Issue Date: 2016

Publication Type: Conference Paper/ Presentation

PURL Identifier: http://purl.umn.edu/235778

Total Pages: 47

JEL Codes: Q12; C15; D92

Series Statement: P9569

Record appears in: Agricultural and Applied Economics Association (AAEA) > 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts





Autor: Saint-Cyr, Legrand D. F.

Fuente: http://ageconsearch.umn.edu/record/235778?ln=en







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