The role of irrigation in farmers' risk management strategies in France | Zendy

Sébastien Foudi | Zendy; Katrin Erdlenbruch | Zendy

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The role of irrigation in farmers' risk management strategies in France

Author(s) -

Sébastien Foudi,

Katrin Erdlenbruch

Publication year - 2011

Publication title -

european review of agricultural economics

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 1.4

H-Index - 60

eISSN - 1464-3618

pISSN - 0165-1587

DOI - 10.1093/erae/jbr024

Subject(s) - endogeneity , production (economics) , variance (accounting) , irrigation , risk management , selection bias , business , probit model , sample (material) , probit , agricultural science , selection (genetic algorithm) , economics , statistics , finance , econometrics , computer science , accounting , environmental science , mathematics , microeconomics , ecology , chemistry , chromatography , artificial intelligence , biology

We analyse the way French farmers manage production risks, especially the risk of drought. To this end, we assess the role of irrigation in farmers' risk management. Based on the European Farm Accountancy Data Network data, we jointly estimate farmers' attitudes to risk and their production decisions. We correct for sample selection bias and endogeneity. Results of the probit model show that irrigation technology serves as a self-insurance. Results of the joint estimation show that irrigating farmers have higher means but lower variance of profits than non-irrigating farmers. However, for already irrigating farmers, using more water volumes increases the variance of outcome

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