Optimal intertemporal investment in Australian agriculture:

This paper empirically investigates optimal intertemporal investment behaviour of farmers in Australia. The dynamic investment model is estimated using pooled cross-sectional and time-series farm survey data spanning the period 1979-1993. The model captures intertemporal investment behaviour of farmers, including independent and instantaneous adjustment decisions. Empirical test results indicate that labour, capital, sheep numbers and cattle numbers adjust sluggishly towards their long-run equilibrium levels. Results provide empirical evidence to indicate that adjustment problem is char-acteristic of production in agricultural zones Australia. Key words: Australia, agricultural zones, optimal intertemporal investment model