IDEAS home Printed from https://ideas.repec.org/a/wly/agribz/v21y2005i1p109-128.html
   My bibliography  Save this article

Heterogeneity in the likelihood of market advisory service use by U.S. crop producers

Author

Listed:
  • Joost M.E. Pennings

    (Department of Agricultural and Consumer Economics, Marketing Group, University of Illinois at Urbana-Champaign, 326 Mumford Hall, MC-710, 1301 W. Gregory Drive, Urbana, IL 61801, and, Department of Social Sciences, Marketing & Consumer Behavior Group, Wageningen University, Hollandseweg 1, 6706 KN, Wageningen, The Netherlands)

  • Scott H. Irwin

    (Department of Agricultural and Consumer Economics, Marketing Group, University of Illinois at Urbana-Champaign, 326 Mumford Hall, MC-710, 1301 W. Gregory Drive, Urbana, IL 61801)

  • Darrel L. Good

    (Department of Agricultural and Consumer Economics, Marketing Group, University of Illinois at Urbana-Champaign, 326 Mumford Hall, MC-710, 1301 W. Gregory Drive, Urbana, IL 61801)

  • Olga Isengildina

    (Department of Agricultural and Consumer Economics, Marketing Group, University of Illinois at Urbana-Champaign, 326 Mumford Hall, MC-710, 1301 W. Gregory Drive, Urbana, IL 61801)

Abstract

Analysis of a unique data set of 1,400 U.S. crop producers using a mixture-modeling framework shows that the likelihood of Marketing Advisory Services (MAS) use is, among others, driven by the perceived performance of MAS in terms of return and risk reduction, the match between the MAS and the crop producer's marketing philosophy, and the interaction between them. The influence of these factors on crop producers' MAS usage is not homogeneous across crop producers. The heterogeneity is played out in different MAS choices and appears to be driven by crop producers' risk attitudes. [EconLit citations: D210, D400, L100, L200, M310, Q120, Q130.] © 2005 Wiley Periodicals, Inc. Agribusiness 21: 109-128, 2005.

Suggested Citation

  • Joost M.E. Pennings & Scott H. Irwin & Darrel L. Good & Olga Isengildina, 2005. "Heterogeneity in the likelihood of market advisory service use by U.S. crop producers," Agribusiness, John Wiley & Sons, Ltd., vol. 21(1), pages 109-128.
    • Handle: RePEc:wly:agribz:v:21:y:2005:i:1:p:109-128
    DOI: 10.1002/agr.20031
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1002/agr.20031
    File Function: Link to full text; subscription required
    Download Restriction: no
    File URL: https://libkey.io/10.1002/agr.20031?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Peter Arcidiacono & John Bailey Jones, 2003. "Finite Mixture Distributions, Sequential Likelihood and the EM Algorithm," Econometrica, Econometric Society, vol. 71(3), pages 933-946, May.
    2. Joost M.E. Pennings & Philip Garcia, 2001. "Measuring Producers' Risk Preferences: A Global Risk-Attitude Construct," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(4), pages 993-1009.
    3. Coble, Keith H. & Knight, Thomas O. & Patrick, George F. & Baquet, Alan E., 1999. "Crop Producer Risk Management Survey: A Preliminary Summary Of Selected Data; A Report From The Understanding Farmer Risk Management Decision Making And Educational Needs Research Project," Information Reports 15805, Mississippi State University, Department of Agricultural Economics.
    4. Joost M.E. Pennings & Scott H. Irwin & Darrel L. Good, 2002. "Surveying Farmers: A Case Study," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 24(1), pages 266-277.
    5. Gerald F. Ortmann & George F. Patrick & Wesley N. Musser & D. Howard Doster, 1993. "Use of private consultants and other sources of information by large cornbelt farmers," Agribusiness, John Wiley & Sons, Ltd., vol. 9(4), pages 391-402.
    6. James J. Heckman, 2001. "Micro Data, Heterogeneity, and the Evaluation of Public Policy: Nobel Lecture," Journal of Political Economy, University of Chicago Press, vol. 109(4), pages 673-748, August.
    7. Michael J. Ginzberg, 1981. "Early Diagnosis of MIS Implementation Failure: Promising Results and Unanswered Questions," Management Science, INFORMS, vol. 27(4), pages 459-478, April.
    8. Michel Wedel & Wayne DeSarbo, 1995. "A mixture likelihood approach for generalized linear models," Journal of Classification, Springer;The Classification Society, vol. 12(1), pages 21-55, March.
    9. Joost M.E. Pennings & Ale Smidts, 2000. "Assessing the Construct Validity of Risk Attitude," Management Science, INFORMS, vol. 46(10), pages 1337-1348, October.
    10. Schroeder, Ted C. & Parcell, Joseph L. & Kastens, Terry L. & Dhuyvetter, Kevin C., 1998. "Perceptions Of Marketing Strategies: Producers Versus Extension Economists," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 23(1), pages 1-15, July.
    11. Wittink, Dick R & Krishnamurthi, Lakshman & Nutter, Julia B, 1982. "Comparing Derived Importance Weights Across Attributes," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 8(4), pages 471-474, March.
    12. Froot, Kenneth A & Scharfstein, David S & Stein, Jeremy C, 1993. "Risk Management: Coordinating Corporate Investment and Financing Policies," Journal of Finance, American Finance Association, vol. 48(5), pages 1629-1658, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Colino, Evelyn V. & Cabrini, Silvina M. & Aulerich, Nicole M. & Brandenberger, Tracy L. & Merrin, Robert P. & Shi, Wei & Irwin, Scott H. & Good, Darrel L. & Martines-Filho, Joao Gomes, 2006. "Advisory Service Marketing Profiles for Soybeans over 2002-2004," AgMAS Project Research Reports 37485, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics.
    2. Pascucci, Stefano & de-Magistris, Tiziana, 2011. "The effects of changing regional Agricultural Knowledge and Innovation System on Italian farmers’ strategies," Agricultural Systems, Elsevier, vol. 104(9), pages 746-754.
    3. Colino, Evelyn V. & Cabrini, Silvina M. & Irwin, Scott H. & Good, Darrel L. & Joao, Martines-Filho, 2004. "Advisory Service Marketing Profiles for Soybeans in 2001," AgMAS Project Research Reports 37507, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics.
    4. Batts, Ryan M. & Brandenberger, Tracy L. & Irwin, Scott H. & Good, Darrel L., 2009. "Advisory Service Marketing Profiles for Soft Red Winter Wheat over 1995-2004," AgMAS Project Research Reports 183427, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics.
    5. Kliethermes, Brandon & Parcell, Joseph L. & Franken, Jason R.V., 2009. "Commercial Grain Merchandisers: What Do They Need to Know?," 2009 Conference, April 20-21, 2009, St. Louis, Missouri 53049, NCCC-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    6. Batts, Ryan M. & Brandenberger, Tracy L. & Irwin, Scott H. & Good, Darrel L., 2009. "Advisory Service Marketing Profiles for Hard Red Winter Wheat over 1995-2004," AgMAS Project Research Reports 183428, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics.
    7. Isengildina, Olga & Pennings, Joost M.E. & Irwin, Scott H. & Good, Darrel L., 2004. "Crop Farmers’ Use of Market Advisory Services," AgMAS Project Research Reports 37489, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics.
    8. Colino, Evelyn V. & Cabrini, Silvina M. & Aulerich, Nicole M. & Brandenberger, Tracy L. & Merrin, Robert P. & Shi, Wei & Irwin, Scott H. & Good, Darrel L. & Martines-Filho, Joao Gomes, 2006. "Advisory Service Marketing Profiles for Corn over 2002-2004," AgMAS Project Research Reports 37484, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Pennings, Joost M.E. & Garcia, Philip & Irwin, Scott H. & Good, Darrel L., 2003. "How To Group Market Participants? Heterogeneity In Hedging Behavior," 2003 Annual meeting, July 27-30, Montreal, Canada 21963, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Pennings, Joost M.E. & Garcia, Philip & Irwin, Scott H., 2011. "Accounting for Heterogeneity in Hedging Behavior: Comparing & Evaluating Grouping Methods," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114787, European Association of Agricultural Economists.
    3. Joost M.E. Pennings & Olga Isengildina-Massa & Scott H. Irwin & Philip Garcia & Darrel L. Good, 2008. "Producers' complex risk management choices," Agribusiness, John Wiley & Sons, Ltd., vol. 24(1), pages 31-54.
    4. Pennings, Joost M. E. & Garcia, Philip, 2004. "Hedging behavior in small and medium-sized enterprises: The role of unobserved heterogeneity," Journal of Banking & Finance, Elsevier, vol. 28(5), pages 951-978, May.
    5. Pennings, Joost M.E. & Isengildina, Olga & Irwin, Scott H. & Good, Darrel L., 2004. "The Impact Of Marketing Advisory Service Recommendations On Producers' Marketing Decisions," 2004 Annual meeting, August 1-4, Denver, CO 20389, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    6. Nikos Kalogeras & Joost M.E. Pennings & Ivo. A. van der Lans & Philip Garcia & Gert van Dijk, 2009. "Understanding heterogeneous preferences of cooperative members," Agribusiness, John Wiley & Sons, Ltd., vol. 25(1), pages 90-111.
    7. Isengildina, Olga & Pennings, Joost M.E. & Irwin, Scott H. & Good, Darrel L., 2004. "Crop Farmers’ Use of Market Advisory Services," AgMAS Project Research Reports 37489, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics.
    8. Marco Costanigro & Yuko Onozaka, 2020. "A Belief‐Preference Model of Choice for Experience and Credence Goods," Journal of Agricultural Economics, Wiley Blackwell, vol. 71(1), pages 70-95, February.
    9. Helena Hansson & Carl Johan Lagerkvist, 2014. "Decision Making for Animal Health and Welfare: Integrating Risk‐Benefit Analysis with Prospect Theory," Risk Analysis, John Wiley & Sons, vol. 34(6), pages 1149-1159, June.
    10. Glynn T. Tonsor & Ted C. Schroeder & Joost M. E. Pennings, 2009. "Factors Impacting Food Safety Risk Perceptions," Journal of Agricultural Economics, Wiley Blackwell, vol. 60(3), pages 625-644, September.
    11. Vassalos, Michael & Li, Yingbo, 2016. "Assessing the Impact of Fresh Vegetable Growers’ Risk Aversion Levels and Risk Preferences on the Probability of Adopting Marketing Contracts: A Bayesian Approach," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 19(1), pages 1-18, February.
    12. Pennings, Joost M.E. & Wansink, Brian & Hoffmann, Arvid O.I., 2011. "A marketing-finance approach linking contracts in agricultural channels to shareholder value," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114785, European Association of Agricultural Economists.
    13. Klumpp, Joni M. & Brorsen, B. Wade & Anderson, Kim B., 2005. "The Impact of Marketing Strategy Information on the Producer's Selling Decision," 2005 Conference, April 18-19, 2005, St. Louis, Missouri 19036, NCR-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    14. Pennings, Joost M.E. & Isengildina, Olga & Irwin, Scott H. & Good, Darrel L. & Garcia, Philip & Frank, Julieta & Kuiper, W. Erno, 2005. "Complex Choices: Producers Risk Management Strategies," 2005 Annual meeting, July 24-27, Providence, RI 19550, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    15. Irwin, Scott H. & Good, Darrel L. & Martines-Filho, Joao Gomes & Jackson, Thomas E., 2000. "Do Agricultural Market Advisory Services Beat The Market? Evidence From The Corn And Soybean Markets Over 1995-1998," AgMAS Project Research Reports 14786, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics.
    16. Jason R.V. Franken & Joost M.E. Pennings & Philip Garcia, 2014. "Measuring the effect of risk attitude on marketing behavior," Agricultural Economics, International Association of Agricultural Economists, vol. 45(5), pages 525-535, September.
    17. 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.
    18. Marco Costanigro & Ron C. Mittelhammer & Jill J. McCluskey, 2009. "Estimating class‐specific parametric models under class uncertainty: local polynomial regression clustering in an hedonic analysis of wine markets," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 24(7), pages 1117-1135, November.
    19. Pennings, Joost M.E. & Garcia, Philip, 2004. "Strategic Risk Management Behavior: What Can Utility Functions Tell Us?," 2004 Annual meeting, August 1-4, Denver, CO 20388, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    20. Pennings, Joost M.E. & Good, Darrel L. & Irwin, Scott H. & Gomez, Jennifer K., 2001. "The Role Of Market Advisory Services In Crop Marketing And Risk Management: A Preliminary Report Of Survey Results," AgMAS Project Research Reports 14772, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:agribz:v:21:y:2005:i:1:p:109-128. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1520-6297 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.