Introduction - The Nature of the Farm - page 11

Table 1.2
Characteristics of farmers and landowners

British Columbia Louisiana Nebraska-South Dakota

Variable 1979 1992 1992 1986

Average age
Landowners 52.8 57.0 63.9 ≈ 50

Farmers 40.9 47.2 46.5 ≈ 40

Average years of education
Landowners 8.3 NA NA NA

Farmers 11.0 NA NA NA

Average acres of owned land
Landowners

NA 499.5 748.5 661.2

Farmers NA 439.4 122.7 435.5

Average acres of owned land
Farmers with no leased land NA 147.4 418.4 NA

Farmers with only share leases NA 412.1 116.8 NA

Farmers with only cash leases NA 241.3 185.4 NA

Percent of women
Landowners NA NA NA 34

Farmers NA NA NA 6

Percent of landowners with farm experience 60 69.5 57.2 NA

Percent of farmers
that rent and own land NA 93 57 NA

that rent and rent out land NA 6 6 6

that both share and cash lease NA 10 24 23

Sources: Appendix A and Allen and Lueck (1995, 1999a).
Note: NA = not available.

landowners have nearly identical demographic characteristics and because farmers make
virtually all the decisions, contrary to their oft-designated “agent” status. Table 1.2 points
out a number of characteristics of the farmers and landowners that are common across all
of our data sets. For example, the table shows that 60 percent of the landowners are or were
at one time farmers. Furthermore, table 1.2 shows that renters are often landowners, and
in some cases (6%) rent out land simultaneously as well as hold both share and cash rent
contracts. The similar social-economic background and demographic features of farmers
and landowners along with the coexistence of owning and leasing are inconsistent with a
model that posits dichotomous preferences and risk sharing.
Another advantage of our risk-neutral approach is that we do not require data on exoge-
nous risk to test the implications of our models. A significant difficulty in conducting tests of
risk sharing lies in finding a reasonable empirical counterpart for the pure random variance