Farm household risk balancing: empirical evidence from Switzerland

Yann de Mey, Erwin Wauters, Dierk Schmid, Steven Van Passel, Mark Vancauteren and Markus Lips

No 182719, 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia from European Association of Agricultural Economists

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.

Keywords: Farm Management; Risk and Uncertainty (search for similar items in EconPapers)
Pages: 12
Date: 2014-08
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Citations: View citations in EconPapers (2)

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Journal Article: Farm household risk balancing: empirical evidence from Switzerland (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:eaae14:182719

DOI: 10.22004/ag.econ.182719

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