Data/hora: 09/06/2024 09:28:44

Provedor de dados: 	Research in Agricultural & Applied Economics (AgEcon Searh)	
País: 	United States	
Título: 	Der Wechsel vom konventionellen zum ökologischen Landbau: Eine investitionstheoretische Betrachtung

Adoption of organic farming – the impact of uncertainty and sunk costs	
Autores: 	Odening,   Martin; Musshoff,   Oliver; Utesch,   Volker.	
Data: 	2010-12-03	
Ano: 	2004	
Palavras-chave: 	Organic farming; Real options; Switching regression; Hysteresis; Farm Management.	
Resumo: 	The objective of this paper is to explore the potential of the real options approach for analyzing farmers’ choice to switch from conventional to organic farming. Understanding the determinants of this decision is relevant in particular for agricultural policy makers when predicting the response of farmers to support programs. After a brief review of the existing literature on barriers to the adoption of organic farming a theoretical model is presented that allows one to incorporate two main features of the adoption decision, namely irreversibility and uncertainty of the returns. The real options model quantifies investment multiples that trigger the adoption of organic farming. Compared with neoclassical models it suggests an inertia of the respective farming type, i.e. economic hysteresis. In order to find some empirical evidence for that hypothesis we utilize a switching regression model has originally been developed to test for market integration. The econometric model is then applied to aggregated data of conventional and organic farms in Germany and Austria spanning the period from 1982 until 2002. The empirical analysis confirms the reluctance to adopt organic farming due to option-like effects. We conclude that the incentives for adoption of organic farming (e.g. higher prices, direct payments or income stabilization) have to be increased if a higher share of this production type seems desirable.	
Tipo: 	Journal Article	
Idioma: 	Alemão	
Identificador: 	ISSN 0002-1121

http://purl.umn.edu/97451	
Relação: 	German Journal of Agricultural Economics&gt; Volume 53, Issue 6, 2004	
Formato: 	10