Farm household risk balancing: empirical evidence from Switzerland

Yann de Mey, E. Wauters, D. Schmid, S. van Passel, Mark Vancauteren, M. Lips

Research output: Contribution to conferenceConference paperAcademicpeer-review

Abstract

This paper presents the first empirical evidence on household risk balancing behavior, i.e., strategic off-farm decisions in response to changes in expected business risk. Using Swiss FADN data, we estimate a fixed effects seemingly unrelated regression model to analyze how farm households jointly alter their levels of debt, off-farm income and consumption. Evidence suggests that in response to changes in expected business risk, farm households make strategic off-farm decisions. Our study demonstrates that part of the behavioral risk response of farm households is ignored when focusing solely on farm-level analyses and illustrates the relevance of the household risk balancing framework.
Original languageEnglish
Publication statusPublished - 31 Mar 2016
EventThe Annual Conference of the Swiss Society for Agricultural Economics and Rural Sociology 2016 - Posieux, Switzerland
Duration: 31 Mar 20161 Apr 2016

Conference

ConferenceThe Annual Conference of the Swiss Society for Agricultural Economics and Rural Sociology 2016
CountrySwitzerland
CityPosieux
Period31/03/161/04/16

Keywords

  • Farm risk; off-farm risk; financial risk; off-farm income; consumption; Farm Management; Risk and Uncertainty

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