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I am working on a discussion of the estate tax effect on farms. The data I have is there are about 2 million family (i.e. not large corporation) farms, and the average value is 1.2M dollars. On the passing of both owners, there would be a tax due if the estate were over 11M dollars.

I looking for something more than the absurd "If 10% or so were valued at over 11M dollars, that would value all the remaining farms at 0." Without knowing more than this average number, can we make any other mathematical conclusion?

md2perpe
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JTP - Apologise to Monica
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  • There is no obvious reason to assume a bell curve type model. There are many exogenous factors...maybe big firms rush to acquire small farms that get over $8$ million or something. Presumably the data is available, you could try to fit a normal to it and see if it looks sensible. – lulu Aug 19 '17 at 13:39

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Not an answer, too long for a comment.

If you want to make a convincing policy argument, mathematics won't help you with the limited data you have. You need more, and it's probably out there.

A search for size distribution family farm

finds many links. Here's one:

http://www.sciencedirect.com/science/article/pii/S0305750X15002703

Ethan Bolker
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Not really. It could be that every farm has exactly the same value, which would be your average. As you say, you could have $10\%$ of the farms exactly at the threshold and the rest worth nothing. We all know it is a broad distribution, but we can't say there are any farms over $11M$.

Ross Millikan
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  • In my argument, I'd be happy to find that zero (over$11M) is true. I am hoping for a way to show a skewed bell curve to offer a logical reason why it's not likely to be over some percent. And so far, can only say that mathematically 10 is the limit. – JTP - Apologise to Monica Aug 19 '17 at 13:36