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

Author

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  • Fabienne Femenia
  • Laure Latruffe
  • Jean-Paul Chavas

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.

Suggested Citation

  • Fabienne Femenia & Laure Latruffe & Jean-Paul Chavas, 2021. "Responsiveness of farm investment to price changes: evidence from the French crop sector," Applied Economics, Taylor & Francis Journals, vol. 53(34), pages 3972-3983, July.
    • Handle: RePEc:taf:applec:v:53:y:2021:i:34:p:3972-3983
    DOI: 10.1080/00036846.2021.1890686
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    Cited by:

    1. Wawrzyniec Czubak & Krzysztof Piotr Pawłowski, 2024. "The Impact of Agricultural Investments on the Economic Efficiency of Production Factors: An Empirical Study of the Wielkopolska Voivodeship," Agriculture, MDPI, vol. 14(12), pages 1-16, December.
    2. Zekiye Şengül, 2025. "Analyzing risk perception, risk attitude, and management strategy using Partial Least Squares Structural Equation Modeling (PLS-SEM) in pistachio production: the case of Siirt Province, Türkiye," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 12(1), pages 1-25, December.

    More about this item

    JEL classification:

    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General

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