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Unique decision making with focus on information use

  • Lunneryd, Daniel
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    This thesis deals with information use as part of the decision making process, when making unique decisions. The focus is set on the specific decision of converting to organic milk production. The thesis seeks to examine how decision making really is conducted in practice and not how it should be conducted. The study is assigned to the “analysis and choice†phase of the decision making process, in which the manager examines and plans one or several solution alternatives and makes a choice. After a literature review, three case studies were conducted, for which data was collected from interviews with milk producers. This information forms the basis for a model, which was tested quantitatively by solving simultaneous equation systems with the LISREL computer program. Data for the quantitative analysis was collected with a questionnaire, which was sent to both organic and conventional milk producers in Sweden. The results show that the reasons for converting to organic production differ substantially. Furthermore, different information sources are preferred in different situations. Most farmers wish to discuss a unique decision, such as converting, with someone in person before they decide. The value structure plays an important role in decision making, although the values differ substantially among producers. Those who converted in the early and middle 1990s mainly had an “ideologyâ€-oriented value structure. However, in recent years converting farmers have had a more profitability-oriented value structure. In the quantitative analysis, seven simultaneous equation systems were analyzed and the estimated solution show several significant factors that seem to affect decision making. One conclusion is that future advisory services and tools should focus on the needs and demands of the farmers. Hence, it is important to focus on what is perceived as future threats and opportunities by the farmers. The threats and opportunities mentioned here are to a large extent the same as those matters, about which the farmers report that they lack information. These include uncertainty about future rules and regulations, impact of organic production on the soil, production results, starting time for organic delivery and economic matters.

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    File URL: http://pub.epsilon.slu.se/299/
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    Paper provided by Swedish University of Agricultural Sciences, Department of Economics in its series Department of Economics publications with number 299.

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    Date of creation: May 2003
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    Handle: RePEc:sua:ekonwp:299
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    1. Fred D. Davis & Richard P. Bagozzi & Paul R. Warshaw, 1989. "User Acceptance of Computer Technology: A Comparison of Two Theoretical Models," Management Science, INFORMS, vol. 35(8), pages 982-1003, August.
    2. Ohlmer, Bo & Olson, Kent & Brehmer, Berndt, 1998. "Understanding farmers' decision making processes and improving managerial assistance," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 18(3), May.
    3. Wossink, G. A. A. & de Koeijer, T. J. & Renkema, J. A., 1992. "Environmental-economic policy assessment: A farm economic approach," Agricultural Systems, Elsevier, vol. 39(4), pages 421-438.
    4. Joyce Willock & Ian J. Deary & Gareth Edwards-Jones & Gavin J. Gibson & Murray J. McGregor & Alistair Sutherland & J. Barry Dent & Oliver Morgan & Robert Grieve, 1999. "The Role of Attitudes and Objectives in Farmer Decision Making: Business and Environmentally-Oriented Behaviour in Scotland," Journal of Agricultural Economics, Wiley Blackwell, vol. 50(2), pages 286-303.
    5. Amos Tversky & Daniel Kahneman, 1979. "Prospect Theory: An Analysis of Decision under Risk," Levine's Working Paper Archive 7656, David K. Levine.
    6. Ohlmer, Bo & Olson, Kent & Brehmer, Berndt, 1998. "Understanding farmers' decision making processes and improving managerial assistance," Agricultural Economics, Blackwell, vol. 18(3), pages 273-290, May.
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