Succession in Agriculture: A Probit and Competing Risk Analysis.” Selected paper, presented at the 2004 Annual AAEA meetings

The present study examines family and farm characteristics affecting the choice and the timing of intergenerational farm transfers. Using survey data which are linked to accounting data for 272 farms in Northern Germany, we use a probit approach to examine whether specific farm and family characteristics are related to the likelihood of succession within a given period. We go beyond the existing literature by applying a competing risk approach to study the process and thus the timing, respectively of the two competing events – succession or exit from farming. We find that farm characteristics significantly influence succession considerations to the extent that they affect the value of the farm for the potential successor. I. Introduction and Literature The analysis of intergenerational transfers has received considerable attention in economics during the last two decades. This literature addresses a wide range of issues and focuses on different types and forms of transfers. Private transfers are usually differentiated with respect to their timing. While gifts (or transfers inter-vivos) are given during the donor’s lifetime