Responsiveness of farm investment to price changes: evidence from the French crop sector

Fabienne Femenia, Laure Latruffe and Jean-Paul Chavas ()

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Abstract: In this article, we investigate the investment behaviour of French crop farmers between 2002 and 2014, with a focus on their adjustments to investment prices and farm output prices, which became more volatile after 2007. We estimate an econometric model of farm investment accounting for farm heterogeneity and allowing for change in behavioural parameters after 2007. Our results show evidence of a significant behavioural change in large investments over time, related to a change in farmers' preferences towards risk, which can explain the relative stability of farm investment over the period, despite the strong increase in crop price levels and in crop price volatility after 2007.

Keywords: Investment; Risk; Risk aversion; Prices; Volatility; Crop farms (search for similar items in EconPapers)
Date: 2021
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Published in Applied Economics, 2021, 53 (34), pp.3972-3983. ⟨10.1080/00036846.2021.1890686⟩

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Journal Article: Responsiveness of farm investment to price changes: evidence from the French crop sector (2021)
Working Paper: Responsiveness of farm investment to price changes: Evidence from the French crop sector (2021)
Working Paper: Responsiveness of farm investment to price changes: Evidence from the French crop sector (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03187933

DOI: 10.1080/00036846.2021.1890686

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