Demand for domestic tobacco has decreased over the past two decades. In 2004, the tobacco buyout program terminated marketing quotas and price support established under the federal tobacco program in 1938. Additionally, in 2003, the World Health Organization Framework Convention on Tobacco Control (WTO FCTC) acknowledged the importance of supply control in conjunction with demand control strategies to eliminate or reduce the consumption of tobacco products. According to the Census of Agriculture, the number of tobacco farms in the US fell by 40 percent between 2002 and 2007. Tobacco farmers are looking for alternative on-farm and off-farm sources of income. This study uses a rank-ordered logit model (ROLM) to explore factors affecting farmers’ perceptions about the potential for grain crops, cotton, peanuts, hay, fruits and vegetables, cow/calf, dairy, beef cattle and, other crops/livestock to replace tobacco production. Results suggest that hay is one of the on-farm enterprises perceived as having the highest potential to replace tobacco among burley tobacco farmers. Age, education, farm size and farm cash receipts were found to affect farmers’ perceptions about the potential for different alternative enterprises to replace tobacco. Additionally, results suggest that researchers should be careful when designing ranking questions in order to maximize rate of response and quality of the data obtained from this type of questions.

The primary objective of this thesis is to examine the preferences local-level economic development directors possess for different firm characteristics when deciding whether to offer incentives. The thesis examines the different incentives that exist in Virginia and finds that incentive activity has been steadily increasing since 1990. The historical rates of business activity reveal that more non-manufacturing firms locate and expand in metropolitan areas, but manufacturing firms in non-metropolitan areas hire more people per firm. The results indicate that this is not due to an explicit strategy of Virginia's economic development directors. A comparison is made between community economic development goals and important firm characteristics as perceived by local-level economic development directors. A rank-ordered logit model is then used to measure the willingness to pay for various firm characteristics. The results indicate that economic developers are willing to pay for increases in firm investment, increases in wages per employee, and decreases in the probability of a firm closing or moving. Economic developers in Virginia are not willing to pay directly for increases in firm employment, but firm employment is important in its indirect effect on the willingness to pay for wages. The linkages of a firm with a community (community (measured by sales impact, the employment multiplier, and overall employment impact) were insignificant variables for all economic developers. / Master of Science