Farmland lease decisions in a life‐cycle model

Optimization procedures are used to investigate economic motivations of farmland lease arrangements in an intertemporal setting and to explore linkages among lease contracts, risk, and time attitudes, and their impact on farm performance. The model solutions suggest farm businesses can be effectively analyzed in a life‐cycle model in which farmland tenure, production, financing, and investment decisions are jointly optimized. The operator’s degree of risk aversion and time attitudes are shown to affect farm business decisions and performance.