Ownership effect in the wild: Influence of land ownership on agribusiness goals and decisions in the Argentine Pampas

Poonam Arora, Federico Bert, Guillermo Podesta and David H. Krantz

Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), 2015, vol. 58, issue C, 162-170

Abstract: The psychological influence of ownership, albeit well studied in the lab, is less understood in the field. We examine its influence on agribusiness goals and decisions in the Argentine Pampas. Study 1, a survey of agribusinesses, finds differences in goal focus based on land ownership: Ownership positively predicts a focus on longer-term economic and social goals, as well as pro-environmental attitudes. Land ownership negatively predicts short-term profitability goal focus, which in turn mediates the use of futures/options to maximize profit, and influences land use for cash crops. Study 2 unpacks within-business differences via interviews with agribusiness that farm both owned and rented land. Ownership-based differences are observed in underlying intentions: the same individual focuses on enhancing the value of owned land, but on maximizing returns from rented land. This focus on deriving immediate value may be motivated by the initial rental cost incurred by the tenant, which can be thought of as a loss, making immediate profitability a more salient goal. This short-term focus, though logical in light of prevailing one-year leases in the Pampas, ignores that over 85% of leases are renewed by the same agribusiness, suggesting that the same tenant may well be the person facing future consequences. We explore the possibility that tenants may be effectively caught in a two-person social dilemma with their future selves.

Keywords: Ownership effect; Goals; Land use decisions; Decision-making; Environmental attitudes; Social dilemma; Argentina (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (12)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:soceco:v:58:y:2015:i:c:p:162-170

DOI: 10.1016/j.socec.2015.02.007

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