Measuring sunk costs in agricultural and food industry assets: why some assets sell below appraisal

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Show simple item record Boland, Michael A. Crespi, John M. Turner, Tracy M. 2015-05-11T14:18:14Z 2015-05-11T14:18:14Z 2015-05-11
dc.description.abstract Asset obsolescence or external obsolescence is a decline in the economic value of capital because of a decrease in demand for the capital’s services. Measurements of sunk costs typically use appraised values of capital. In food and agricultural industries facing asset obsolescence due to government policy, appraised values may be greatly overstated and this has implications for research on industrial structure. A theoretical model to account for the appraisal error is developed and the method is applied to the U.S. sugar beet industry. The sugar beet industry displays symptoms of asset obsolescence. Our estimates indicate that plant appraisals using currently accepted practices greatly overstated the true value of these assets in 2006. en_US
dc.language.iso en_US en_US
dc.relation.uri en_US
dc.rights The final publication is available at en_US
dc.subject Sunk costs en_US
dc.subject Obsolescence en_US
dc.subject Real estate appraisal en_US
dc.subject Stranded capital en_US
dc.subject Sugar beet en_US
dc.title Measuring sunk costs in agricultural and food industry assets: why some assets sell below appraisal en_US
dc.type Article (publisher version) en_US 2014 en_US
dc.citation.doi doi:10.1515/jafio-2014-0009 en_US
dc.citation.epage 63 en_US
dc.citation.issue 1 en_US
dc.citation.jtitle Journal of Agricultural & Food Industrial Organization en_US
dc.citation.spage 53 en_US
dc.citation.volume 12 en_US
dc.contributor.authoreid jcrespi en_US
dc.contributor.authoreid turner en_US

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