Abstract
US aggregate data show declining numbers of farms but increasing average sizes, while disaggregated data unveil possibilities for concurrent declines in numbers and farming areas, in some US states, reflecting more exits from the farming sector. Thus, this paper investigates potential determinants of entry and exit decisions in the US farming sector. The theoretical model and econometric analysis applied on a panel dataset covering 50 states over the period 2002–2019 reveal that households' incomes, agricultural financial access, and unemployment are positively related to entries, while the population density is negatively associated with entries in the US farming sector. Therefore, households' incomes and agricultural financial access could be used as policy instruments to enhance (discourage) entries into (exits from) the US farming sector.
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