A Quantile Regression Analysis of the Effect of Farmers’ Attitudes and Perceptions on Market Participation

Authors

  • Philip Kostov,

  • Sophia Davidova

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    • Philip Kostov is Reader in Quantitative Economics, Lancashire Business School, University of Central Lancashire, Preston, Lancashire, PR1 2HE, UK. E-mail: pkostov@uclan.ac.uk for correspondence. Sophia Davidova is Professor of European Agricultural Policy, School of Economics, University of Kent. E-mail: S.M.Davidova@kent.ac.uk for correspondence. Research for this paper benefitted from data collected within the EU FP6 Programme SCARLED project (SSPE-CT-2006-044201). The authors are grateful to Alastair Bailey, Lena Fredriksson, and Cornelia Suta for their contribution to the design of the survey instrument and the dataset, and to anonymous reviewers and the editors for constructive comments.


Abstract

The objective of this study is to investigate the subjective determinants of farmers’ participation in output markets in five EU New Member States (NMS) characterised by large semi-subsistence sectors. It employs quantile regression to model market participation reflecting the heterogeneity amongst farmers. The study also uses the Bayesian adaptive lasso to simultaneously select important covariates and estimate the corresponding quantile regression models. The empirical results show that only two variables affect all quantiles, while their effect varies across quantiles. Some of the remaining variables affect the share of output sold at the lower quantiles (i.e. for subsistence- and semi-subsistence-oriented farmers) only, whereas other variables are only significant at the upper quantiles (i.e. for more commercially oriented farms). Advisory services, and particularly agricultural business advice, and information and advice on markets and prices can facilitate the market participation of subsistence-oriented farms.

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