Abstract
This article investigates how socio-economic factors and incentives affect farmers’ investment behaviour. The motivation is a need for a better quantitative knowledge of investment behaviour in order to support farmers’ investment decisions through extension services and public investment support schemes. Data from a questionnaire survey among 208 Danish pig producers are analysed by use of logistic regression and the relationships between socio-economic factors, investment incentives and farmers’ investment behaviour are empirically revealed. The results show that the farmers who rank economic incentives as the most important when making investments are those who yield the best financial results. Off-farm income and partial productivity were also higher on these farms. As hypothesised, young farmers with a large production are more likely to invest in real assets than others. No cross sectional trends relating the incentives for making investments to the investment propensity were identified. One important policy implication of the results is that improved knowledge of the socio-economic factors and their influence on investment behaviour and incentives may reduce the deadweight loss associated with many governmental investment programmes.
| Original language | English |
|---|---|
| Journal | Acta Agriculturae Scandinavica. Section C. Food Economics |
| Volume | 8 |
| Issue number | 3 |
| Pages (from-to) | 173-185 |
| Number of pages | 13 |
| ISSN | 1650-7541 |
| DOIs | |
| Publication status | Published - 2011 |