Economies of diversification and stochastic dominance analysis in French mixed sheep farms

Jean Joseph Minviel and Marc Benoit

Agricultural and Resource Economics Review, 2022, vol. 51, issue 1, 156-177

Abstract: Farm diversification is mainly driven by risk mitigation effects and economic gains related to complementarities between production activities. By combining these two aspects, we investigate diversification economies in a sample of French mixed sheep farming systems and rank these systems using stochastic dominance criteria. Partially diversified systems (Sheep-Grass, Sheep-Crop, Sheep-Landless) and fully diversified systems (Sheep-Grass-Crop-Landless) were evaluated. We find a high degree of diversification diseconomies in the sheep farming systems considered. The results also indicate that the fully diversified system is driven by its risk-reducing effects (including downside risk exposure) and that Sheep-Crop is the dominant system in terms of risk-adjusted returns.

Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:cup:agrerw:v:51:y:2022:i:1:p:156-177_8

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