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An analysis of the intention-realisation discrepancy in EU farmers’ land investment decisions

Listed author(s):
  • Marianne Lefebvre

    (European Commission, Joint Research Centre, IPTS, E-41092 Seville, Spain)

  • Meri Raggi

    (University of Bologna, Department of Statistical Sciences, I-40126 Bologna, Italy)

  • Sergio Gomez Y Paloma

    (European Commission, Joint Research Centre, IPTS, E-41092 Seville, Spain)

  • Davide Viaggi

    (University of Bologna, Department of Statistical Sciences, I-40126 Bologna, Italy)

The article analyses the discrepancy between farmers’ investment intentions and the observed realisations. We focus on intentions to investment in land on the part of 171 farmers in 6 EU case study areas (collected in 2006) and their realised investments between 2006 and 2009. While the farmers who had no intention to invest mostly follow their plans, only 36% of those who intended to invest in 2006 have done so by 2009. We set up a recursive bivariate probit model in which intention is an endogeneous regressor of the realisation. We show that stated intentions are a reasonably good predictor of realised actions, and highlight drivers of the discrepancy between intentions and realisations, such as pessimistic expectations regarding the future of both agricultural markets and the farm when no successor is known. Some recommendations on the use of stated intention surveys to study the farming sector are provided.

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Article provided by INRA Department of Economics in its journal Review of Agricultural and Environmental Studies.

Volume (Year): 95 (2014)
Issue (Month): 1 ()
Pages: 51-75

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Handle: RePEc:rae:jourae:v:95:y:2014:i:1:p:51-75
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