Farmer response to policies promoting organic farming technologies in Finland
Pietola, Kyösti S.; Oude Lansink, Alfons (2001)
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Pietola, Kyösti S.
Oude Lansink, Alfons
Julkaisusarja
European Review of Agricultural Economics
Volyymi
28
Numero
1
Sivut
1-15
Oxford University Press
2001
Tiivistelmä
This paper analyses factors determining the choice between standard and organic farming technology in Finland by numerically iterating a Bellman eqationg backwards in time. The unknown parameters of a switching-type Probit model are estimated by maximum likelihood estimation. The maximised values of the uncertain revenue streams are simulated. The resultes suggest that decreasing output prices and increasing direct subsidies trigger the switch to organic farming. The switch is also more likely on farms having large land areas and low yields. Intensive livestock production and labour-intensive production decrease the probability of switching to organic farming.
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