Producer Risk Aversion and Participation in Agricultural Cooperatives

Jason Franken; Michael L. Cook; Joost Pennings

doi:10.1016/j.jcom.2022.100171

Producer Risk Aversion and Participation in Agricultural Cooperatives

Jason Franken^*, Michael L. Cook, Joost Pennings

^*Corresponding author for this work

Research output: Contribution to journal › Article › Academic › peer-review

Abstract

Little attention is given to cooperatives’ role in producer risk management. We review literature and theory in development of a hypothesized positive relationship between producers’ risk aversion and usage of cooperatives. We test the hypothesis using a sample of crop and hog producers and find evidence that cooperative membership and the percentage of commodity sold through cooperatives are positively related to producers’ risk aversion. These relationships are relevant for decision makers who determine internal cooperative member policies, debt providers to cooperative members, and lenders to cooperatives, in addition to state and national farm policy regulators, legislators, staffers, and advisors.

Original language	English
Article number	100171
Number of pages	8
Journal	Journal of Co-operative Organization and Management
Volume	10
Issue number	2
DOIs	https://doi.org/10.1016/j.jcom.2022.100171
Publication status	Published - Dec 2022

JEL classifications

q10 - Agriculture: General
m31 - Marketing
d81 - Criteria for Decision-Making under Risk and Uncertainty
q13 - "Agricultural Markets and Marketing; Cooperatives; Agribusiness"
d23 - "Organizational Behavior; Transaction Costs; Property Rights"

Keywords

COOPERATIVES
Risk attitudes
marketing
new institutional economics
New Institutional Economics
MANAGEMENT
TRANSACTION COSTS
CONTRACTS
DETERMINANTS
Cooperatives
Marketing
HOUSEHOLD WELFARE EVIDENCE
MEMBERSHIP
MARKETING COOPERATIVES
FARMERS
PREFERENCES
Risk attitude
COLLECTIVE ACTION

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10.1016/j.jcom.2022.100171

Cite this

@article{85b23127b867428ba98419f3be4e02aa,

title = "Producer Risk Aversion and Participation in Agricultural Cooperatives",

abstract = "Little attention is given to cooperatives{\textquoteright} role in producer risk management. We review literature and theory in development of a hypothesized positive relationship between producers{\textquoteright} risk aversion and usage of cooperatives. We test the hypothesis using a sample of crop and hog producers and find evidence that cooperative membership and the percentage of commodity sold through cooperatives are positively related to producers{\textquoteright} risk aversion. These relationships are relevant for decision makers who determine internal cooperative member policies, debt providers to cooperative members, and lenders to cooperatives, in addition to state and national farm policy regulators, legislators, staffers, and advisors.",

keywords = "COOPERATIVES, Risk attitudes, marketing, new institutional economics, New Institutional Economics, MANAGEMENT, TRANSACTION COSTS, CONTRACTS, DETERMINANTS, Cooperatives, Marketing, HOUSEHOLD WELFARE EVIDENCE, MEMBERSHIP, MARKETING COOPERATIVES, FARMERS, PREFERENCES, Risk attitude, COLLECTIVE ACTION",

author = "Jason Franken and Cook, {Michael L.} and Joost Pennings",

note = "data source: primary data, field study",

year = "2022",

month = dec,

doi = "10.1016/j.jcom.2022.100171",

language = "English",

volume = "10",

journal = "Journal of Co-operative Organization and Management",

issn = "2213-297X",

publisher = "Elsevier BV",

number = "2",

}

TY - JOUR

T1 - Producer Risk Aversion and Participation in Agricultural Cooperatives

AU - Franken, Jason

AU - Cook, Michael L.

AU - Pennings, Joost

N1 - data source: primary data, field study

PY - 2022/12

Y1 - 2022/12

N2 - Little attention is given to cooperatives’ role in producer risk management. We review literature and theory in development of a hypothesized positive relationship between producers’ risk aversion and usage of cooperatives. We test the hypothesis using a sample of crop and hog producers and find evidence that cooperative membership and the percentage of commodity sold through cooperatives are positively related to producers’ risk aversion. These relationships are relevant for decision makers who determine internal cooperative member policies, debt providers to cooperative members, and lenders to cooperatives, in addition to state and national farm policy regulators, legislators, staffers, and advisors.

AB - Little attention is given to cooperatives’ role in producer risk management. We review literature and theory in development of a hypothesized positive relationship between producers’ risk aversion and usage of cooperatives. We test the hypothesis using a sample of crop and hog producers and find evidence that cooperative membership and the percentage of commodity sold through cooperatives are positively related to producers’ risk aversion. These relationships are relevant for decision makers who determine internal cooperative member policies, debt providers to cooperative members, and lenders to cooperatives, in addition to state and national farm policy regulators, legislators, staffers, and advisors.

KW - COOPERATIVES

KW - Risk attitudes

KW - marketing

KW - new institutional economics

KW - New Institutional Economics

KW - MANAGEMENT

KW - TRANSACTION COSTS

KW - CONTRACTS

KW - DETERMINANTS

KW - Cooperatives

KW - Marketing

KW - HOUSEHOLD WELFARE EVIDENCE

KW - MEMBERSHIP

KW - MARKETING COOPERATIVES

KW - FARMERS

KW - PREFERENCES

KW - Risk attitude

KW - COLLECTIVE ACTION

U2 - 10.1016/j.jcom.2022.100171

DO - 10.1016/j.jcom.2022.100171

M3 - Article

SN - 2213-297X

VL - 10

JO - Journal of Co-operative Organization and Management

JF - Journal of Co-operative Organization and Management

IS - 2

M1 - 100171

ER -

Producer Risk Aversion and Participation in Agricultural Cooperatives

Abstract

JEL classifications

Keywords

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