Analysing Farmers’ Use of Price Hedging Instruments: An Experimental Approach

Anastassiadis Friederike (), Feil Jan-Henning (), Oliver Musshoff and Schilling Philipp ()
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Anastassiadis Friederike: Department of Agricultural Economics and Rural Development, Georg-August-Universität Göttingen, Göttingen, Germany
Feil Jan-Henning: Department of Agricultural Economics and Rural Development, Georg-August-Universität Göttingen, Göttingen, Germany
Schilling Philipp: Cargill GmbH (Grain Trading, Cargill Grain & Oilseed Supply Chain Europe), Salzgitter, Germany

Journal of Agricultural & Food Industrial Organization, 2014, vol. 12, issue 1, 181-192

Abstract: This paper analyses the influencing factors of farmers’ use of price hedging instruments (PHIs) based upon a discrete choice experiment with German grain farmers. A mixed logit model is used to determine whether farmers’ choices of PHIs against cash sales are influenced by their price expectation, their risk attitude and their available storage capacities. The results show that farmers with a price expectation below the actual price level have a higher preference for using PHIs against cash sales in general and that the individual degree of risk aversion can have a significant impact on farmers’ choices of a specific PHI. A generally lower preference of farmers with available storage capacities for using PHIs as assumed in many theoretical contributions in the literature, however, cannot be confirmed.

Keywords: price hedging instruments; grain marketing; discrete choice experiment; mixed logit (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (6)

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Related works:
Journal Article: Analysing Farmers’ Use of Price Hedging Instruments: An Experimental Approach (2015)
Working Paper: ANALYSING FARMERS’ USE OF PRICE HEDGING IN-STRUMENTS: AN EXPERIMENTAL APPROACH (2014)
Working Paper: Analysing farmers' use of price hedging instruments: an experimental approach (2013)
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DOI: 10.1515/jafio-2014-0007

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