Differential uncertainties and risk attitudes between conventional and organic producers: the case of Spanish arable crop farmers |
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Authors: | Teresa Serra David Zilberman José M. Gil |
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Affiliation: | 1. Centre de Recerca en Economia i Desenvolupament Agroalimentaris (CREDA)‐UPC‐IRTA, Parc Mediterrani de la Tecnologia, Edifici ESAB, Avinguda del Canal Olímpic 15, 08860 Castelldefels, Spain;2. Department of Agricultural and Resource Economics, 207 Giannini Hall #3310, University of California, Berkeley, CA 94720‐3310, USA |
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Abstract: | The growing importance of economic factors in farmers' decisions to go organic has raised interest in characterizing the economic behavior of organic versus conventional farms. In general, published analyses so far have not considered differential uncertainties, abilities to control production risk, and farmers' risk preferences between conventional and organic practices when comparing these techniques. Our article attempts to assess this issue. We use a model of farmer decision under risk to analyze the differential values between organic and conventional Spanish arable crop farms and to assess the incentives for adoption of organic practices. Results show that organic and conventional farms do have different production risks as well as different aversions to risk. Organic price premiums and subsidies are found to be powerful instruments to motivate adoption of organic techniques. |
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Keywords: | D21 Q12 Q18 Organic farming Adoption Risk Risk preferences |
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