Do farm operators benefit from direct to consumer marketing strategies?

Abstract

Using farm-level data this study investigates factors associated with the choice of three direct marketing strategies (DMSs). Particular attention is given to the role of management and marketing skills in selection of DMSs. Additionally, the study applies a selectivity-based approach for the multinomial logit model to assess the relationship between DMSs and the financial performance of the business. Results suggest that both management and marketing skills significantly affect direct-to-consumer sales. Farmers choosing the strategy of sales only through direct-toconsumer outlets report earnings that are significantly lower than earnings from the other marketing strategies. Marketing skills prove to be beneficial to direct-to-consumer (DTC) earnings. Finally, the selectivity correction terms in the direct sales model are significantly negative in the choice of DTC, indicating the presence of sample selection effects. Accounting for selectivity is essential to ensure unbiased and consistent estimates.JEL classifications: C25, Q12, Q13, Q16

Vertical coordination mechanisms and farm performance amongst smallholder rice farmers in northern Ghana

“…This finding suggests that farmers with relatively larger farm sizes earn significantly higher net farm incomes. While our finding is consistent with studies by Park et al (), other studies found a negative and statistically significant impact of farm size on net farm incomes (e.g., Ma & Abdulai, 2016). Education exhibits a positive and statistically significant impact on net farm incomes for the written contract specification, suggesting that better education contributes to higher net farm incomes for farmers participating in written contracts.…”

“…That is, the number of selectivity correction terms is equal to the number of vertical coordination alternatives. It also identifies the direction and sources of bias (Park, Mishra, & Wozniak, 2014). In this study, we use the selectivity bias correction method by Bourguignon et al (2007), which we refer to as "Multinomial BFG Model", as it provides deeper insights into the impact of coordination mechanisms on-farm performance.…”

Agritourism and off‐farm work: survival strategies for small farms

“…Next, we apply a selectivity‐based approach for the multinomial logit (MNL) model to assess the impact of participation in agritourism, off‐farm work, or both strategies on the farm's financial performance and the economic well‐being of small farm business households. We chose the selectivity‐based approach because neglect of selectivity has an adverse effect on estimated coefficients in impact equations (Park et al., ). This is demonstrated in a similar study by Trost and Lee (), who included selectivity corrections on polychotomous choice decision models and found that earnings due to schooling would have been underestimated had they not accounted for selectivity.…”

Farm Stores in agriburbia: The roles of agricultural retail on the rural-urban fringe

“…Extensive literature has emerged surrounding agritourism and its role in rural development. Useful overviews of agritourism exist about the study area (Ainley & Smale, 2010;Stobbe et al, 2010;Tew & Barbieri, 2012 ) and about direct marketing of farm products (Park, Mishra, & Wozniak, 2014;Tippins, Rassuli, & Hollander, 2002). Schilling et al (2012) describe agritourism as a way for farmers to utilize all of the resources of their farms, and found that the large majority of agritourism activities occur on small farms such as those found in our study area as well.…”