Farm household risk balancing: empirical evidence from Switzerland

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

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 conference › Conference paper › Academic › peer-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 language	English
Publication status	Published - 31 Mar 2016
Event	The Annual Conference of the Swiss Society for Agricultural Economics and Rural Sociology 2016 - Posieux, Switzerland Duration: 31 Mar 2016 → 1 Apr 2016

Conference

Conference	The Annual Conference of the Swiss Society for Agricultural Economics and Rural Sociology 2016
Country/Territory	Switzerland
City	Posieux
Period	31/03/16 → 1/04/16

Keywords

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

Cite this

@conference{46f6ae8f87f44f3e91f294e90f5f2323,

title = "Farm household risk balancing: empirical evidence from Switzerland",

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.",

keywords = "Farm risk, off-farm risk, financial risk, off-farm income, consumption, Farm Management, Risk and Uncertainty",

author = "{de Mey}, Yann and E. Wauters and D. Schmid and {van Passel}, S. and Mark Vancauteren and M. Lips",

year = "2016",

month = mar,

day = "31",

language = "English",

note = "The Annual Conference of the Swiss Society for Agricultural Economics and Rural Sociology 2016 ; Conference date: 31-03-2016 Through 01-04-2016",

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TY - CONF

T1 - Farm household risk balancing: empirical evidence from Switzerland

AU - de Mey, Yann

AU - Wauters, E.

AU - Schmid, D.

AU - van Passel, S.

AU - Vancauteren, Mark

AU - Lips, M.

PY - 2016/3/31

Y1 - 2016/3/31

N2 - 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.

AB - 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.

KW - Farm risk

KW - off-farm risk

KW - financial risk

KW - off-farm income

KW - consumption

KW - Farm Management

KW - Risk and Uncertainty

M3 - Conference paper

T2 - The Annual Conference of the Swiss Society for Agricultural Economics and Rural Sociology 2016

Y2 - 31 March 2016 through 1 April 2016

ER -

Farm household risk balancing: empirical evidence from Switzerland

Abstract

Conference

Keywords

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Cite this