1,721,115 research outputs found
What determines farmers' acceptance of supply contracts? - The case of sugar beets
No full textLittle is known about the actual behavior of farmers who are offered forward contracts for renewable resources. The present survey therefore investigates farmers' acceptance of sugar beet supply contracts. It is found that the farmers' responses are not in line with forecasts which are based on critical prices derived from naive gross margin comparisons. Moreover, it becomes clear that - apart from the expected effects of uncertainty and risk attitude - contracts find an all the more lower acceptance, the lower farmers assess their own economic competence. It is furthermore found that the subsequent improvement of a contract offer which is made after an initial offer had been rejected by the farmers finds a lower acceptance than a better initial offer
Non-metric data: a note on a neglected problem in DEA studies
No full textData envelopment analysis (DEA) is widely used to compare the empirical performance of public institutions such as law enforcement agencies, judicial authorities or national health care systems. Many DEA analysts, however, ignore the fact that DEA efficiency values are non-metric. They consequently do not hesitate to compute (arithmetic) means. They do not hesitate either to treat DEA values as metric data in econometric analyses. Instead of providing useful insights into the performance of public bodies, the confusion of non-metric data with metric data constitutes a lack of internal validity that may cause serious fallacies. Against this background, we believe that a clear warning against an uncritical processing and interpretation of DEA values is pertinent and should be routinely considered by efficiency analysts as well as referees of efficiency papers
What determines farmers' acceptance of supply contracts? - The case of sugar beets
No full textLittle is known about the actual behavior of farmers who are offered forward contracts for renewable resources. The present survey therefore investigates farmers' acceptance of sugar beet supply contracts. It is found that the farmers' responses are not in line with forecasts which are based on critical prices derived from naive gross margin comparisons. Moreover, it becomes clear that - apart from the expected effects of uncertainty and risk attitude - contracts find an all the more lower acceptance, the lower farmers assess their own economic competence. It is furthermore found that the subsequent improvement of a contract offer which is made after an initial offer had been rejected by the farmers finds a lower acceptance than a better initial offer
Using business simulation games in regulatory impact analysis - the case of policies aimed at reducing nitrogen leaching
No full textIn the past, regulatory impact analysis was predominantly based on the rational-choice-assumption of a completely informed and exclusively profit-maximizing homo oeconomicus. Real economic actors, however, are multiple-goal and boundedly rational decision-makers. An exclusive reliance on rational-choice models therefore generates the risk that both the pace and the type of behavioural adaptations to changing institutional environments are misjudged. Against this background, this article addresses three questions. First, can we use business simulation games as a convincing but low-cost experimental tool for policy analysis? Second, how do intentionally varied nitrogen extensification schemes impact the behaviour of students who participate in an explorative business simulation study? Third, do nitrogen reduction policies that are framed as voluntary as opposed to prescriptive schemes have a different impact on behaviour even if they lead to the same profits respectively? In our business simulation game, the student-participants take the role of farmers who are confronted with different policy measures aimed at reducing nitrogen loads. The student-farmers react very differently to different measures even though all measures have an identical impact on profitability. This is an indication that the behavioural changes that can be achieved per Euro of the taxpayers' money, and therefore the cost efficiency (and smartness) of regulatory measures, are contingent on their specific design
Optimizing Production Decisions Using a Hybrid Simulation-Genetic Algorithm Approach
No full textMathematical programming has for a long time been recognized as a powerful tool. Despite its capacity for solving constrained optimization problems under uncertainty, some methodological obstacles have persisted over the years. The main problem is that the eventually complex results of an unbiased statistical analysis (multiple correlated stochastic variables with different distributions and nonadditive links between) cannot be adequately accounted for within minimization of total absolute deviation (MOTAD) or expected value-variance (EV) models that rely on the algorithmic determination of the variability measure. In this paper, we develop a methodological hybrid consisting of Monte Carlo simulation and genetic algorithms: the Monte Carlo simulation facilitates the easy representation of diverse stochastic processes and correlation, and the genetic algorithm ensures that the optimization procedure remains applicable even in the case of complex stochastic information. This hybrid approach is applied to the production-planning problem of a German crop farm. Variant calculations are used to account for the unknown risk attitude of the farmer. Model results demonstrate that optimized production programs and expected total gross margins are not only highly sensitive to the risk attitude, but also to the stochastic processes that are estimated (or assumed) for various activities. We furthermore find evidence that the hybrid approach is able to generate considerable improvement in farm-program decisions and outperforms planning models that assume static distributions.German Research Foundation (DFG
Muss man begrenzte Rationalität und heuristisches Entscheiden bei der Erklärung für die Verbreitung von Wetterindexversicherungen in der Landwirtschaft berücksichtigen?
No full textWeather-index insurances are innovative risk management instruments that - compared to conventional insurances - cause low administration and regulation costs and are not accompanied by moral hazard or adverse selection problems. Despite these advantages, farmers make little use of weather-index insurances as yet. With this in mind, the present study focuses on the question if bounded rationality provides an explanation for the missing willingness to adopt this type of insurance. For lack of a natural experiment, an "extra-laboratory experiment" is carried out in the form of a multi-period, single-person business simulation game with students of agricultural sciences. Two major questions are to be answered: first, does the demand for weather-index insurances change if the subjects are not only informed about the total insurance premium but also about the loading? Second, does demand change in a framing where subjects are told that the (unchanged loading) is the result of a subsidized insurance offer? In the experiment, the explicit communication of the loading did not have a significant effect. However, demand increased in the subsidization framing. This indicates that government funding is per se considered as a quality signal and that subsidized actions are preferred without an individual analysis of their relative competitiveness
Sind Unternehmensplanspiele ein geeignetes Instrument zur Analyse begrenzter Rationalität und tatsächlichen Entscheidungsverhaltens?
No full textRegulatory policies often aim to steer the behaviour of economic agents by changing their framework conditions. Assessing the impact of such policies requires forecasts of how humans adapt to changes in their economic environment. A prerequisite for a meaningful policy impact analysis is a profound knowledge why and to what extent economic agents behave in a bounded rational way. We propose that business management games be used to contribute to a better understanding since they provide an inexpensive opportunity to reach beyond the existing anecdotic evidence of "behavioural anomalies". Modifying an existing business management game, in which investment, financing and production decisions have to be made, we demonstrate how bounded rationality can be quantified and separated into its two components: incomplete information and limited cognitive abilities. The resulting data indicate that the decisions made by the participants of the game have been strongly influenced by bounded rationality. They also show that both incomplete information and limited cognitive abilities are relevant components of the bounded rationality that has been displayed by the players. Regulatory impact analysts who base their forecasts a priori on the standard rational choice assumption cause the risk of measures being designed for economic agents that do not exist in reality
How attractive are jobs in the agricultural sector? Influencing factors and diversity in this field
No full textAccording to demographic forecasts, the German labour force supply will decrease dramatically over the next decades. In its attempt to attract sufficiently large numbers of young professionals the farming sector may thus face fierce competition from other industries. With this in mind, we have carried out a survey among various social groups: students of agriculture, employees from both within and from outside the agricultural field, and farmers. Regarding the perception of jobs in the agricultural industry this survey produced some interesting results: First, outsiders have an overwhelmingly negative assessment of the industry's working conditions. They overestimate, for example, the required overtime hours. Second, given the great number of non-economic advantages the sense of professional fulfilment and job satisfaction are considerably higher within the farming industry than outside. Third, there are effective and less effective ways to increase job satisfaction by providing a little "top-up". A pay rise leads to farm workers proportionally accepting an increased number of annual working hours by working more hours each weak. The opposite is true if the overall work load is increased by reducing employees' annual leave entitlement. Since many people outside the agricultural world often have but poor information about the industry and its jobs, conveying objective information about the excellent and diverse working opportunities is crucial if the sector is to compete successfully for qualified young professionals
Adoption of organic farming in Germany and Austria: an integrative dynamic investment perspective
No full textFarm-level adaptation to changing economic environments is often slower than expected. Technological innovations, for instance, are frequently adopted at a later date than the net present value of investment suggests. This can be explained by a model of "investment under uncertainty," which consistently accounts for uncertainty, sunk costs, and the flexibility of investment timing. Its essential conclusion is that, due to temporal opportunity costs, critical incremental cash flows that trigger investments might be higher than those needed for simple cost recovery. This accounts for an ostensible reluctance to invest (economic hysteresis). In this article, we demonstrate how slow conversion to organic farming in general, and the different rates of conversion in Germany and Austria in particular, can be explained by the new investment theory. Copyright (c) 2008 International Association of Agricultural Economists.
Smarte Regulierung in der Ernährungswirtschaft durch Name-and-Shame
Full text linkEine Reihe von Lebensmittelskandalen der jüngeren Vergangenheit hat gezeigt, dass fehlgeleitete ökonomische Anreize eine bedeutsame Risikoquelle sind. Der Normappell des Gesetzes reicht augenscheinlich nicht bei allen Lebensmittelunternehmern aus, um sie von gewinnträchtigen Verstößen gegen lebensmittelrechtliche Vorschriften abzuhalten. Vor diesem Hintergrund gibt der vorliegende Beitrag mit Blick auf die Ernährungswirtschaft einen Überblick über Regulierungsanforderungen, -möglichkeiten und -ansätze. Für eine effektive und kosteneffiziente Prävention sind smarte Regulierungsansätze erforderlich, die nicht nur dysfunktionale Effekte wie Crowding-Out und Reaktanz vermeiden, sondern in der Lage sind, intrinsische Motive und extrinsische Anreize zur Regelbefolgung gleichzeitig zu stärken (Crowding-In). Insbesondere Name-and-Shame erscheint hierfür aus verhaltensökonomischer Sicht geeignet zu sein.A series of food scandals has indicated lately that misdirected economic incentives, in conjunction with a lack of norms to abide by the law, induce non-compliance with food regulations and thus behavioural food risks. Against this background, we outline both the specific need for regulation and the available regulatory approaches in the food sector. An effective and cost-efficient prevention of rule-breaking behaviour requires smart regulation. Smart approaches to regulation not only avoid the dysfunctional effects of crowding-out and reactance but simultaneously enhance intrinsic motives and extrinsic incentives to comply (crowding-in). From a behavioural economic point of view, name-and-shame has a good chance of qualifying as "smart"
- …
