where is the standard deviation of annual profits of farm i, is
the standard deviation of annual cash flow generated by farm i, is a
dummy variable, which value is 1 when the farm applies historic cost valuation to
biological assets and 0 otherwise, is the annual variation of profit of farm iin
year jwith respect to previous year, is the annual variation of cash flow
generated by farm iin year jwith respect to previous year and is the annual
variation of sales of farm iin year jwith respect to previous year.
i
profitstdv i
dv cashflowst
i sthistoricco
ij
profit
ij cashflow
ij
sales
We performed an ordinary least squares regression for equation (1) and panel data with
random effects regressions for equations (2) and (3), thus correcting for autocorrelation
disturbances. As we did not find data of whole years for all farms, and the panel data
was unbalanced, we performed panel dataregressions with random effects.