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Farm household risk balancing: empirical evidence from Switzerland

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Listed:
  • Yann de Mey
  • Erwin Wauters
  • Dierk Schmid
  • Markus Lips
  • Mark Vancauteren
  • Steven Van Passel

Abstract

Empirical evidence on household risk balancing behaviour is presented by estimating a fixed effects seemingly unrelated regression model using Swiss Farm Accountancy Data Network data. We find that in response to changes in expected business risks, Swiss farm households not only make strategic farm financial risk decisions (original risk balancing), but also make strategic off-farm decisions (household risk balancing) by altering their share of off-farm income and relative consumption. Small farms appear to make more use of household risk balancing strategies whereas large farms conversely make more use of the original risk balancing strategy.

Suggested Citation

  • Yann de Mey & Erwin Wauters & Dierk Schmid & Markus Lips & Mark Vancauteren & Steven Van Passel, 2016. "Farm household risk balancing: empirical evidence from Switzerland," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 43(4), pages 637-662.
    • Handle: RePEc:oup:erevae:v:43:y:2016:i:4:p:637-662.
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    File URL: http://hdl.handle.net/10.1093/erae/jbv030
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    Cited by:

    1. Robert Finger & Nadja El Benni, 2021. "Farm income in European agriculture: new perspectives on measurement and implications for policy evaluation," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 48(2), pages 253-265.
    2. Daniel Burkhard & Christian P. R. Schmid & Kaspar Wüthrich, 2019. "Financial incentives and physician prescription behavior: Evidence from dispensing regulations," Health Economics, John Wiley & Sons, Ltd., vol. 28(9), pages 1114-1129, September.
    3. Boncinelli, Fabio & Bartolini, Fabio & Casini, Leonardo, 2018. "Structural factors of labour allocation for farm diversification activities," Land Use Policy, Elsevier, vol. 71(C), pages 204-212.
    4. repec:ags:cfcp15:344398 is not listed on IDEAS
    5. Huang, Zengjian & Wang, Leyi & Meng, Jing, 2024. "Does rural e-commerce improve the economic resilience of family farms?," International Review of Economics & Finance, Elsevier, vol. 95(C).
    6. Aleksandrova, Olha & Azadi , Hossein & Värnik, Rando & Nurmet, Maire & Viira, Ants-Hannes, . "The Determinants of Farm Income Variability: Evidence From Estonia," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 73(3).
    7. Komarek, Adam M. & De Pinto, Alessandro & Smith, Vincent H., 2020. "A review of types of risks in agriculture: What we know and what we need to know," Agricultural Systems, Elsevier, vol. 178(C).
    8. Pierre Chiaverina & Sophie Drogué & Florence Jacquet & Larry Lev & Robert King, 2023. "Does short food supply chain participation improve farm economic performance? A meta‐analysis," Agricultural Economics, International Association of Agricultural Economists, vol. 54(3), pages 400-413, May.
    9. Thomas Slijper & Yann de Mey & P Marijn Poortvliet & Miranda P M Meuwissen, 2022. "Quantifying the resilience of European farms using FADN," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 49(1), pages 121-150.
    10. Mauro Vigani & Jonas Kathage, 2019. "To Risk or Not to Risk? Risk Management and Farm Productivity," American Journal of Agricultural Economics, John Wiley & Sons, vol. 101(5), pages 1432-1454, October.
    11. Adhikari, Sudip & Khanal, Aditya R., 2020. "Does higher business risk influence financial risk and induce savings among small agricultural operations? Findings from Tennessee," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304509, Agricultural and Applied Economics Association.
    12. Sarker, Rakhal, 2021. "Farm Safety Net Payments and Risk Balancing in Ontario Beef Sector," 2021 Conference, August 17-31, 2021, Virtual 315321, International Association of Agricultural Economists.
    13. Möhring, Niklas & Dalhaus, Tobias & Enjolras, Geoffroy & Finger, Robert, 2020. "Crop insurance and pesticide use in European agriculture," Agricultural Systems, Elsevier, vol. 184(C).
    14. Rakhal Sarker & Truc Phan & Yu Na Lee & Alfons Weersink, 2022. "Business Risk Management Program and risk‐balancing in Ontario hog sector: An empirical analysis," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 70(4), pages 287-304, December.
    15. Stefanos A. Nastis & Konstadinos Mattas & George Baourakis, 2019. "Understanding Farmers’ Behavior towards Sustainable Practices and Their Perceptions of Risk," Sustainability, MDPI, vol. 11(5), pages 1-13, March.
    16. Aderajew, Tamirat S. & Du, Xiaoxue & Pennings, Joost M. E. & Trujillo-Barrera, Andres, 2020. "Farm-Level Risk-Balancing Behavior and the Role of Latent Heterogeneity," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 45(2), March.
    17. Mishenin, Yevhen & Marekha, Iryna & Yarova, Inessa & Kovalova, Olha & Pizniak, Tetiana, . "Optimizing a portfolio of agri-environmental investments," Agricultural and Resource Economics: International Scientific E-Journal, Agricultural and Resource Economics: International Scientific E-Journal, vol. 8(01).

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