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Farm-Level Income Generation Microsimulation Model

  • Cathal O’DonoghueEmail author
Chapter

Abstract

In order to be able to model dynamic policy or market changes, one needs to understand the production process in more detail. In this chapter, we develop a dynamic microsimulation model built around farm-level production, cost, supply and demand functions that are estimated on farm-level data. These can be used to model counterfactual changes to market prices, etc. In this chapter, we estimate a system of equations utilising panel data that at the farm level, with individual demand for inputs and supply of outputs. We, in particular, incorporate the impact of detailed agronomic drivers of farm level outputs using geo-referenced data. A detailed ex-post and ex-ante validation evaluation is undertaken to assess the simulation performance of the models. We utilise the modelling framework to consider the impact of exchange rate changes on farm-level behaviour as a result of the UK’s decision to leave the EU. The conclusions amplifying the static analysis in Chapter 3, of the divide between dairy on the one hand and cattle and sheep on the other due to the impact of price changes on stocking rate decisions as well as long-term productivity growth.

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Copyright information

© The Author(s) 2017

Authors and Affiliations

  1. 1.Rural Economy and Development ProgrammeAthenryIreland

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