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Joint measurement of farm size and farm performance: a confirmatory factor analysis

Joint measurement of farm size and farm performance: a confirmatory factor analysis Purpose – The purpose of this paper is to determine if a single dominant measure defines farm size and farm performance consistently over a ten‐year time period, or if alternative measures are needed. The paper also seeks to determine the correlation between farm size and farm performance and how this correlation may change over time. Design/methodology/approach – A confirmatory factor analysis was used to test the relative strength of farm size and performance indicator variables and estimate the relationship between farm size and performance latent variables. Data were collected from the North Dakota Farm and Ranch Business Management Association (NDFRBA) Annual Summaries for 2000‐2009. Findings – Results demonstrated that a single indicator, such as acres or rate of return on assets, may not capture the array of farm size and farm performance concepts and multiple indicators should be used to jointly determine farm size and farm performance measures. Results also found a sequential decrease in correlation between farm size and performance for seven of the ten years. Originality/value – This paper addresses the issue regarding multiple measures for farm size and farm performance which helps provide the framework to begin developing a systematic classification of farms for use in strategic farm planning and guide future government policies, federal farm programs, and environmental regulations. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Agricultural Finance Review Emerald Publishing

Joint measurement of farm size and farm performance: a confirmatory factor analysis

Agricultural Finance Review , Volume 71 (3): 15 – Nov 8, 2011

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References (35)

Publisher
Emerald Publishing
Copyright
Copyright © 2011 Emerald Group Publishing Limited. All rights reserved.
ISSN
0002-1466
DOI
10.1108/00021461111177585
Publisher site
See Article on Publisher Site

Abstract

Purpose – The purpose of this paper is to determine if a single dominant measure defines farm size and farm performance consistently over a ten‐year time period, or if alternative measures are needed. The paper also seeks to determine the correlation between farm size and farm performance and how this correlation may change over time. Design/methodology/approach – A confirmatory factor analysis was used to test the relative strength of farm size and performance indicator variables and estimate the relationship between farm size and performance latent variables. Data were collected from the North Dakota Farm and Ranch Business Management Association (NDFRBA) Annual Summaries for 2000‐2009. Findings – Results demonstrated that a single indicator, such as acres or rate of return on assets, may not capture the array of farm size and farm performance concepts and multiple indicators should be used to jointly determine farm size and farm performance measures. Results also found a sequential decrease in correlation between farm size and performance for seven of the ten years. Originality/value – This paper addresses the issue regarding multiple measures for farm size and farm performance which helps provide the framework to begin developing a systematic classification of farms for use in strategic farm planning and guide future government policies, federal farm programs, and environmental regulations.

Journal

Agricultural Finance ReviewEmerald Publishing

Published: Nov 8, 2011

Keywords: United States of America; Farms; Agriculture; Performance measures; Farm size; Farm performance; Management

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