Farmers’ heterogeneous responses to price variations: Identification of dairy farms flexibility based on a panel smooth transition regression approach - Archive ouverte HAL
Communication Dans Un Congrès Année : 2022

Farmers’ heterogeneous responses to price variations: Identification of dairy farms flexibility based on a panel smooth transition regression approach

Résumé

Our objective is to identify the heterogeneity in the flexibility of dairy farms based on their observed short run responses to input and output prices. We aim at providing an economic explanation to the relative rigidity or flexibility of these farms. A lack of flexibility in the responses of farm production decisions to market prices can in fact be due to the existence of adjustment costs related to the rigidity of quasi-fixed inputs or to additional administrative or transaction costs incurred by the farms when adjusting their variable input levels. For this purpose, we propose an analytical framework, based on panel smooth transition regression (PSTR) model, that implicitly accounts for the impacts of input adjustment costs on dairy farmers’ production decisions. Our model allows distinguishing farmers according to their speed of reaction in response to price changes, and to identify farmers who appear to be most flexible in the short run. This characterization of farm flexibility at individual level is made possible by the introduction of random parameters, specific to each farm, in the transition function of our PSTR model. The introduction of random parameters in the model requires the use of estimation techniques adapted to this type of model and to the specificity of the panel data available in agricultural production economics, which generally exhibit large individual but short time dimensions. We rely here on a stochastic approximation expectation maximization (SAEM) algorithm. Our model is estimated on a sample of French dairy farms over the period 2007-2018. Our empirical results reveal heterogeneous levels of flexibility for these farms regarding their short run adjustment of feed strategy in response to significant variations in the price of milk and feed concentrates. The most flexible farms in our sample appear to be more autonomous both financially and in terms of animal feed.
Fichier non déposé

Dates et versions

hal-04315360 , version 1 (30-11-2023)

Identifiants

  • HAL Id : hal-04315360 , version 1

Citer

Elodie Letort, Fabienne Femenia. Farmers’ heterogeneous responses to price variations: Identification of dairy farms flexibility based on a panel smooth transition regression approach. American Association of Agricultural Economics Annual Meeting, American Association of Agricultural Economics, Jul 2022, Anaheim (California), United States. ⟨hal-04315360⟩
24 Consultations
0 Téléchargements

Partager

More