Staff Publications

Staff Publications

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    'Staff publications' is the digital repository of Wageningen University & Research

    'Staff publications' contains references to publications authored by Wageningen University staff from 1976 onward.

    Publications authored by the staff of the Research Institutes are available from 1995 onwards.

    Full text documents are added when available. The database is updated daily and currently holds about 240,000 items, of which 72,000 in open access.

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Record number 400309
Title Is Hedging a Habit? Hedging Ratio Determination of Cotton Producers
Author(s) Dorfman, J.H.; Pennings, J.M.E.; Garcia, P.
Source Journal of Agribusiness 28 (2010)1. - ISSN 0738-8950 - p. 31 - 48.
Department(s) Marketing and Consumer Behaviour
Publication type Refereed Article in a scientific journal
Publication year 2010
Abstract We examine the role that habit plays when producers determine their hedge ratio. Data were collected from U.S. cotton growers in which they indicated their hedging position in 2001 and 2002 as well as their perceived profitability, land ownership structure, and income. To account for heterogeneity, a generalized mixture regres-sion model is used to identify the influence of the determinants of the hedge ratio. Our results identified two segments. In the smaller segment, consisting of 35% of the producers, habit did not affect the hedge ratio; instead, land ownership and perceived profitability were most influential. In the larger segment, consisting of 65% of the producers, the hedge ratio was solely driven by habit. The results show the important role of habit formation in understanding producers’ employed hedge ratio, confirm the importance of heterogeneity, and strengthen the relation-ship between financial structure and market-risk mitigating behavior.
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