Working Paper

Off-farm income and risk reduction in agriculture: when does it matter?

Abstract: Investment behavior is analyzed using a dynamic portfolio model including off-farm income. The correlation structure of off-farm income and asset returns and the ratio of off-farm income to wealth is shown to affect portfolio choice. Empirical analysis indicates that off-farm income tends to increase farm assets.

Keywords: Agriculture; Farm income; Wages;

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Bibliographic Information

Provider: Federal Reserve Bank of Atlanta

Part of Series: FRB Atlanta Working Paper

Publication Date: 1995

Number: 95-14