Organic Farming as a Rational Choice

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Abstract
Based on a postal survey of farmers conducted in 2004 in Western Germany (n = 657), a rational choice model of the adoption of organic farming is tested. Using methods of direct utility measurement, rational choice (RC) theory is applied directly in the empirical study. By that, questionable assumptions on the variability of preferences and the type of preferences to use in RC explanations can be avoided. The results indicate that the subjectively expected utility model is well suited to explain the adoption of organic farming. Expectations on the development of operational characteristics of the farm and farmers' daily work are at the core of the decision. Farmers especially consider aspects like pest and weed control, the development of yields or the use of chemical substances. While solely economic factors like prices and marketing are also important, these are subordinate to operational aspects. In addition, a moderate impact of environmental concern regarding the adoption of organic farming is observed.

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