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Explaining structural policy use by farmers with discrete choice models: an evaluation of structural policies supported by the EAGGF /доклад на 87 семинаре ЕААЕ, Assessing Rural Development Policies of the CAP, Vienna, Austria, 21-23 April 2004

Опубликовано на портале: 31-03-2005
A farmer’s choice to part-take into an on farm investment programme can be modelled as a discrete choice. The idea of this paper is to test the possibility of using discrete choice models in the field of the evaluation of structural policies. Farmers choose to take part into agricultural programmes according to their preferences, their structural type and their economic environment. Adhesion to a voluntary scheme or policy can be cast as a discrete choice problem. Hence, discrete choice models are adequate to describe probability of choice, especially against a framework of utility maximization. First, we want to explore if the choice of investing in schemes supported by EAGGF depends on farms’ characteristics, such as Used Agricultural Area, Standard Gross Margin, Farm type, Possession of lands, Form of Farm Management, Standard Work Unit, class of European Size Unit, Fixed costs, etc.. We use is the binomial logit model to explain the probability of making an on-farm investment with regard to Italian Central and Northern Regions. The estimation of such a model allows us to identify the determinants of such a decision. We also use discrete choice analysis to identify the significant determinants of the probability of selection of on-farm investment across 12 investment categories within the Regulation (EC) No 950/97. These include – amongst others – land purchase, system for refusal treatment, land improvement, agricultural machinery, agricultural and non-agricultural farm buildings, land improvements, permanent cultivations etc. We find such an approach to be insightful on the basis of data from the Italian RICA business farm survey, and hence propose to develop it further.

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