The Role of Farmer's Behavioral Attitudes and Heterogeneity in Futures Contracts Usage

Posted: 1 Oct 2001

See all articles by Joost M. E. Pennings

Joost M. E. Pennings

Maastricht University; Wageningen UR

Raymond M. Leuthold

University of Illinois @ Urbana-Champaign

Abstract

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.

Suggested Citation

Pennings, Joost M. E. and Leuthold, Raymond M., The Role of Farmer's Behavioral Attitudes and Heterogeneity in Futures Contracts Usage. American Journal of Agricultural Economics, Vol. 82, No. 4, November 2000. Available at SSRN: https://ssrn.com/abstract=246772

Joost M. E. Pennings (Contact Author)

Maastricht University ( email )

P.O. Box 616
Maastricht, 6200MD
Netherlands

Wageningen UR ( email )

Hollandseweg 1
Wageningen, 6706KN
Netherlands

Raymond M. Leuthold

University of Illinois @ Urbana-Champaign ( email )

1301 W. Gregory Drive
326 Mumford Hall
Urbana, IL 61801
United States
217-333-1810 (Phone)
217-333-5538 (Fax)

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