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

Fingerprint

Farm households
Switzerland
Farm
Empirical evidence
Business risk
Household
Debt
Fixed effects
Off-farm income
Regression model
Strategic behavior
Seemingly unrelated regression

Keywords

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

Cite this

de Mey, Y., Wauters, E., Schmid, D., van Passel, S., Vancauteren, M., & Lips, M. (2016). Farm household risk balancing: empirical evidence from Switzerland. Paper presented at The Annual Conference of the Swiss Society for Agricultural Economics and Rural Sociology 2016, Posieux, Switzerland.
de Mey, Yann ; Wauters, E. ; Schmid, D. ; van Passel, S. ; Vancauteren, Mark ; Lips, M. / Farm household risk balancing: empirical evidence from Switzerland. Paper presented at The Annual Conference of the Swiss Society for Agricultural Economics and Rural Sociology 2016, Posieux, Switzerland.
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de Mey, Y, Wauters, E, Schmid, D, van Passel, S, Vancauteren, M & Lips, M 2016, 'Farm household risk balancing: empirical evidence from Switzerland' Paper presented at The Annual Conference of the Swiss Society for Agricultural Economics and Rural Sociology 2016, Posieux, Switzerland, 31/03/16 - 1/04/16, .

Farm household risk balancing: empirical evidence from Switzerland. / de Mey, Yann; Wauters, E.; Schmid, D.; van Passel, S.; Vancauteren, Mark; Lips, M.

2016. Paper presented at The Annual Conference of the Swiss Society for Agricultural Economics and Rural Sociology 2016, Posieux, Switzerland.

Research output: Contribution to conferenceConference paperAcademicpeer-review

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

M3 - Conference paper

ER -

de Mey Y, Wauters E, Schmid D, van Passel S, Vancauteren M, Lips M. Farm household risk balancing: empirical evidence from Switzerland. 2016. Paper presented at The Annual Conference of the Swiss Society for Agricultural Economics and Rural Sociology 2016, Posieux, Switzerland.