Participation in a mutual fund covering losses due to pest infestation: analyzing key predictors of farmers’ interest through machine learning

Abstract

In the context of intensified Halyomorpha halys infestations in Italy, this paper provides a very first investigation of key factors that drive fruit growers’ intention to participate in a mutual fund (MF) compensating production losses due to this invasive insect. Data were collected in Veneto Region in Italy, where many farmers suffered H. halys attacks, and interest in the development of innovative risk management tools is growing. The study investigates how behavioral (risk attitude, risk perception) and personality factors (self-efficacy, locus of control) explain farmers’ intention to participate in the MF, additionally controlling for a large number of primary control data (e.g. farmers’ perceptions and characteristics, farm characteristics). The study assumes approximate sparsity and applies the least absolute shrinkage and selection operator (LASSO), a machine learning technique which represents an original approach for research on risk management. Our empirical analysis reveals that farmers’ intention to participate in the MF is driven by an interplay between the perceived risk of production loss, the benefits from participation in the fund, and the farm age, rather than by socio-economic characteristics of the farm. Results provide valuable insights for policymakers and local stakeholders to implement a mutual fund close to the farmers’ needs.

Grower assessment of profitability impact from Brown Marmorated Stink Bug, Halyomorpha halys (Stål), the value of management information sources, and use of potential management practices

“…The variable 'Years farming' was binary coded with (1) representing respondents with less than 20 years of experience and ( 0) otherwise. Experienced farmers often may have different perspectives and risk tolerance compared to newer or younger farmers (Höschle et al, 2023;Jetter & Paine, 2004). The binary variables 'Tree Fruits & Nuts' and 'Small…”

“…The binary variable 'Gross Sales (>$250,000)' was utilized to evaluate the impact of income on decision-making processes. Economic scale of growers can influence their risk tolerance, access to resources and ability to invest in new management strategies (Höschle et al, 2023;Jetter & Paine, 2004). Final model selection was based on a goodness-of-fit measure called the Akaike information criterion (AIC).…”

“…The success of biological control agents to suppress BMSB problems relies on growers' willingness to use the control agent and its associated costs and benefits. Several studies have addressed general topic of economics of biological controls assessing grower intentions and perspectives (Carlson, 1988;Cullen et al, 2008;Dellinger et al, 2016;Giampietri et al, 2020;Höschle et al, 2023;Jetter & Paine, 2004;Naranjo et al, 2015). There is limited information about the value of alternative management practices to growers and factors influencing their decision to use them.…”