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Relating Farm and Operator Characteristics to Multiple Goals

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  • Harman, Wyatte L.
  • Eidman, Vernon R.
  • Hatch, Roy E.
  • Claypool, P. L.

Abstract

Economic analyses of firm behavior are typically based on the assumption of maximization or minimization of a single goal. While economists recognize that multiple goals are important in making business decisions, a single goal, such as profit maximization, is used because it is operational and it provides an analytical approximation of firm behavior. However, the reduction of year-to-year income variability, providing an acceptable family living level, increasing net worth, additional leisure time, and many other goals have been suggested as being important to some farm firms. Some analyses have considered two or more of these goals by maximizing one subject to a constraint on another. In other cases, a utility function has been estimated for an individual farmer incorporating both expected income and variability of income. Although these efforts have been useful, progress towards incorporating multiple goals into empirical models has been inhibited by the inability to correctly specify important goals and the difficulty of incorporating several goals into frequently-used models. The recent development of simulation routines for farm firm analyses provides an analytical procedure that is sufficiently flexible to incorporate multiple goals. While it may be difficult to provide all of the information that is needed concerning goals and their use in decision making, additional information indicating the ranking of goals and the manner in which this hierarchy differs for farmers under alternative economic and noneconomic conditions provides a better basis for the selection of organizational and financial strategies.

Suggested Citation

  • Harman, Wyatte L. & Eidman, Vernon R. & Hatch, Roy E. & Claypool, P. L., 1972. "Relating Farm and Operator Characteristics to Multiple Goals," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 4(1), pages 215-220, July.
  • Handle: RePEc:cup:jagaec:v:4:y:1972:i:01:p:215-220_01
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    References listed on IDEAS

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    1. Frederick Mosteller, 1951. "Remarks on the method of paired comparisons: I. The least squares solution assuming equal standard deviations and equal correlations," Psychometrika, Springer;The Psychometric Society, vol. 16(1), pages 3-9, March.
    2. Frederick Mosteller, 1951. "Remarks on the method of paired comparisons: II. The effect of an aberrant standard deviation when equal standard deviations and equal correlations are assumed," Psychometrika, Springer;The Psychometric Society, vol. 16(2), pages 203-206, June.
    3. George F. Patrick & Ludwig M. Eisgruber, 1968. "The Impact of Managerial Ability and Capital Structure on Growth of the Farm Firm," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 50(3), pages 491-506.
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    1. Sintori, Alexandra & Rozakis, Stelios & Tsiboukas, Kostas, 2009. "Multiple goals in farmers’ decision making: The case of sheep farming in Western Greece," 83rd Annual Conference, March 30 - April 1, 2009, Dublin, Ireland 51075, Agricultural Economics Society.
    2. Pérez-Blanco, C. D & Standardi, G., 2019. "Farm waters run deep: a coupled positive multi-attribute utility programming and computable general equilibrium model to assess the economy-wide impacts of water buyback," Agricultural Water Management, Elsevier, vol. 213(C), pages 336-351.
    3. Gómez-Limón, José A. & Gutiérrez-Martín, Carlos & Riesgo, Laura, 2016. "Modeling at farm level: Positive Multi-Attribute Utility Programming," Omega, Elsevier, vol. 65(C), pages 17-27.
    4. Redman, Barbara J., 1980. "Rural Development: A Critique," 1980 Annual Meeting, July 27-30, Urbana-Champaign, Illinois 278482, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. Baker, C.B. & Barry, Peter J. & Lee, Warren F. & Olson, Carl E. & Hochman, Eithan & Rausser, Gordon S. & Kottke, Marvin W., 1977. "Economic Growth of the Agricultural Firm," Western Region Archives 260636, Western Region - Western Extension Directors Association (WEDA).
    6. Stelios Rozakis & Alexandra Sintori & Konstantinos Tsiboukas, 2009. "Utility-derived Supply Function of Sheep Milk: The Case of Etoloakarnania, Greece," Working Papers 2009-11, Agricultural University of Athens, Department Of Agricultural Economics.
    7. Agata Sielska, 2015. "The impact of weights on the quality of agricultural producers' multicriteria decision models," Operations Research and Decisions, Wroclaw University of Science and Technology, Faculty of Management, vol. 25(4), pages 51-69.

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