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The Role of Farmers' Behavioral Attitudes and Heterogeneity in Futures Contracts Usage
Author(s) -
Pennings Joost M.E.,
Leuthold Raymond M.
Publication year - 2000
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1111/0002-9092.00090
Subject(s) - futures contract , futures market , sample (material) , structural equation modeling , economics , cluster (spacecraft) , business , econometrics , marketing , financial economics , statistics , mathematics , chemistry , chromatography , computer science , programming language
The relationship between farmers' behavioral attitudes and use of futures contracts is examined, taking into account non‐directly observable variables and the heterogeneity of farmers. The relationships are tested on a stratified data sample of 440 farmers. Cluster analysis and covariance structure equation models are used to validate the relationships. Farmers are found not to be homogenous regarding the factors influencing their use of futures. Heterogeneity at the segment level masked important effects at the aggregate level, notably risk attitude. Furthermore, several psychological constructs for farmers related to market orientation, risk exposure, market performance and entrepreneurial behavior play important roles in their use of futures contracts