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Strategies to Manage Risk and their Role in Impacting Economic Performance among Farm Households

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  • Hisham S. El-Osta

Abstract

Data from the 2015 ARMS and a multinomial probit regression model were used in an attempt to discern the impact of socio-economic factors on the likelihood of a farm household falling in a favorable income-wealth category delineated by above-median income and wealth levels. A primary determinant considered was the number of risk management strategies utilized by the farm household. Findings indicate that farmers who layer up the adoption of risk management strategies are most likely to secure an economic performance status characterized by ¡®low-income, high-wealth¡¯. Aging farm operators and those with college education and who operate larger sized farms are found more likely to be in the top economic performance category of ¡®high-income, high-wealth'.

Suggested Citation

  • Hisham S. El-Osta, 2018. "Strategies to Manage Risk and their Role in Impacting Economic Performance among Farm Households," Applied Economics and Finance, Redfame publishing, vol. 5(2), pages 49-64, March.
  • Handle: RePEc:rfa:aefjnl:v:5:y:2018:i:2:p:49-64
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    More about this item

    Keywords

    economic performance; risk-management strategy; zero-inflated poisson model; multinomial probit regression;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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