Farm household risk balancing: empirical evidence from Switzerland

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

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15 Citations (Scopus)

Abstract

Empirical evidence on household risk balancing behaviour is presented by estimating a fixed effects seemingly unrelated regression model using Swiss Farm Accountancy Data Network data. We find that in response to changes in expected business risks, Swiss farm households not only make strategic farm financial risk decisions (original risk balancing), but also make strategic off-farm decisions (household risk balancing) by altering their share of off-farm income and relative consumption. Small farms appear to make more use of household risk balancing strategies whereas large farms conversely make more use of the original risk balancing strategy.
Original languageEnglish
Pages (from-to)637-662
JournalEuropean Review of Agricultural Economics
Volume43
Issue number4
DOIs
Publication statusPublished - 2016

Keywords

  • farm risk, off-farm risk, financial risk, off-farm income, consumption

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