Valuing Farm Financial Information

and Shonkwiler (1994) found that production practices were better than financial management
indicators in predicting farm financial success.

Although the academic literature is replete with examples exposing the merits of farm
record keeping and investigating the link between record keeping and financial performance,
very little is known regarding the value farmers place on their financial information and the
determinants of such value. Clearly, such information is needed as public institutions determine
the quantity and quality of resources to devote to encouraging and supporting maintenance of
farm records.

The primary purpose of this article is to determine the value farmers place on their
financial information and the determinants of such value. We use a willingness-to-accept
experimental auction and survey to elicit values and information. Experimental auctions have
been used to estimate demand for and value numerous lower-valued goods or foods (e.g., Fox
1995; Fox et al. 1998; List and Shogren 1998; Lusk et al. 2001a, 2001b; Lusk, Roosen, and Fox
2003; Roosen et al. 1998; Shogren, List, and Hayes 2000). This article uniquely uses such
auctions to evoke values for extremely high-valued goods, in this case business records.

This article tests the following hypotheses: (a) farmers that spend more time preparing
and analyzing records will value their records more highly; (b) farmers with higher gross sales
and more acres (larger farms) will value their records more highly; (c) farmers with more
education will value their records more highly; (d) younger farmers will value their records more
highly; (e) farmers with more accurate records will value their records more highly; (f) farmers
that use more accurate measures of farm performance will value their records more highly; (g)
farmers that have financial training will value their records more highly; (h) farmers using
technology to prepare financial records will value their records more highly; (i) farmers that use

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