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Farmers Decision Making Behavior/Empirical Findings from Denmark

Author

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  • Jacobsen, Brian H.

Abstract

Farmers decisions are often based on past experience which is then transformed into simple "rules of thumb". These rules are quick, easy and cheap, but seem to have some deficiencies compared to the assumptions in neo-classical economic theory. This is one of the preliminary findings from interviews among 25 Danish full time farmers. In general, the short-run decision rules are aimed at maximizing profit, whereas decision rules concerning intermediate and long-run decisions seemed to have a tendency of underestimating capital and labour costs, but overvaluing tax-reductions. The rules seemed in most cases to be based on marginal cost principles, where average cost principles may have been more appropriate. The long- run decisions, although affected by non-economic goals, are probably not irrational, but the farmers are perhaps not aware of the risk they take in order to meet these goals.

Suggested Citation

  • Jacobsen, Brian H., 1993. "Farmers Decision Making Behavior/Empirical Findings from Denmark," 9th Congress, Budapest, Hungary, 1993 346194, International Farm Management Association.
    • Handle: RePEc:ags:ifma93:346194
    DOI: 10.22004/ag.econ.346194
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