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Understanding The Determinants Of Investment Reactions To Decoupling


  • Gallerani, Vittorio
  • Gomez y Paloma, Sergio
  • Raggi, Meri
  • Viaggi, Davide


The objective of this paper is identify the determinants of reaction to decoupling, focusing, in particular, on farm strategies and investment behaviour both on-farm and off-farm investment. The paper analyses a sample of 248 farm-households located in 8 EU countries, using decision tree algorithms. The factors emerging as determinants of an increase of on-farm investment as a reaction to decoupling are the existence of a successor, age, farm size, part time vs. full time head of farm. Allowing for the use of country variables, these tend to account already for the factors listed above and become the main predictors, followed by labour endowment, specialisation and expectations.

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  • Gallerani, Vittorio & Gomez y Paloma, Sergio & Raggi, Meri & Viaggi, Davide, 2008. "Understanding The Determinants Of Investment Reactions To Decoupling," 109th Seminar, November 20-21, 2008, Viterbo, Italy 44841, European Association of Agricultural Economists.
  • Handle: RePEc:ags:eaa109:44841

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    References listed on IDEAS

    1. Elhorst, J Paul, 1993. "The Estimation of Investment Equations at the Farm Level," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 20(2), pages 167-182.
    2. Cornelis Gardebroek & Alfons G.J.M. Oude Lansink, 2004. "Farm-specific Adjustment Costs in Dutch Pig Farming," Journal of Agricultural Economics, Wiley Blackwell, vol. 55(1), pages 3-24.
    3. Ahituv, Avner & Kimhi, Ayal, 2002. "Off-farm work and capital accumulation decisions of farmers over the life-cycle: the role of heterogeneity and state dependence," Journal of Development Economics, Elsevier, vol. 68(2), pages 329-353, August.
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    Cited by:

    1. Matthews, Alan & Salvatici, Luca & Scoppola, Margherita, 2017. "Trade Impacts of Agricultural Support in the EU," Commissioned Papers 252767, International Agricultural Trade Research Consortium.
    2. Viaggi, Davide & Raggi, Meri & Gomez y Paloma, Sergio, 2011. "Farm-household investment behaviour and the CAP decoupling: Methodological issues in assessing policy impacts," Journal of Policy Modeling, Elsevier, vol. 33(1), pages 127-145, January.
    3. Giannoccaro, Giacomo & Berbel, Julio, 2012. "The Determinants of Farmer’s Intended Behaviour Towards the Adoption of Energy Crops in Southern Spain: an Application of the Classification Tree-Method," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), issue 2, August.
    4. Carillo, Felicetta & Carillo, Maria Rosaria & Venittelli, Tiziana & Zazzaro, Alberto, 1. "Aging and succession on Italian farms," Politica Agricola Internazionale - International Agricultural Policy, Edizioni L’Informatore Agrario, issue 1.
    5. Minarelli, Francesca & Raggi, Meri & Viaggi, Davide, 2015. "Innovation in European food SMEs: determinants and links between types," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), issue 1, April.

    More about this item


    PAC reform; investment behaviour; households; decoupling; Agricultural and Food Policy; Consumer/Household Economics; Q18; Q12.;

    JEL classification:

    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy

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