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

12 Pages Posted: 24 Mar 2020

See all articles by Joost M. E. Pennings

Joost M. E. Pennings

Maastricht University; Wageningen UR; University of Illinois at Urbana-Champaign - Department of Agricultural and Consumer Economics

Raymond M. Leuthold

University of Illinois @ Urbana-Champaign

Date Written: November 2000

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

Keywords: covariance structure model, measurement error, segments, futures usage, Q120, Q140

Suggested Citation

Pennings, Joost M. E. and Leuthold, Raymond M., The Role of Farmers' Behavioral Attitudes and Heterogeneity in Futures Contracts Usage (November 2000). American Journal of Agricultural Economics, Vol. 82, Issue 4, pp. 908-919, 2000, Available at SSRN: https://ssrn.com/abstract=3558098 or http://dx.doi.org/10.1111/0002-9092.00090

Joost M. E. Pennings (Contact Author)

Maastricht University ( email )

P.O. Box 616
Maastricht, 6200MD
Netherlands

HOME PAGE: http://marketing-finance.nl/cv/cvpennings.pdf

Wageningen UR ( email )

Hollandseweg 1
Wageningen, 6706KN
Netherlands

HOME PAGE: http://marketing-finance.nl/cv/cvpennings.pdf

University of Illinois at Urbana-Champaign - Department of Agricultural and Consumer Economics

1301 W. Gregory Drive
326 Mumford Hall MC-710
Urbana, IL 61801
United States
217-244-1284 (Phone)
217-333-5538 (Fax)

HOME PAGE: http://marketing-finance.nl/cv/cvpennings.pdf

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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