The fallacy of composition on the example of incomes in European agriculture

Łukasz Kryszak , Jakub Staniszewski

Abstract

Determinants of agricultural income are often analysed both on sectoral and farm level. The results of this research are frequently contradictory. They may indicate the existence of the fallacy of composition. In the case of agriculture, it occurs when actions undertaken by the farmers to maximise their incomes bring opposite results to incomes analysed on a sectoral level. The aim of the paper is to examine in a systematic way whether this problem is real for agriculture in the European Union. Based on a literature review, a set of agricultural income determinants was established, as well as measure of that income. We constructed panel regression models based on a FADN (microeconomic) and EAA (sectoral) data. The results obtained indicate different sets of determinants of income on the farm and sector level. From the perspective of the individual farm, the intensification strategy proved to be effective despite higher dynamics of input prices than agricultural output prices, while in the sector as a whole, intensification growth has insignificant impact on income levels. In the case of specialisation, from the point of view of the whole sector, moderate specialisation may be optimal; in micro terms, either a high or low level of specialisation is more beneficial. Modernisation was a determinant of income in both sectoral and farm perspective. Overall our results indicate that the fallacy of composition exists also in the context of agricultural income.
Author Łukasz Kryszak (WE / KMiGŻ)
Łukasz Kryszak,,
- Department of Macroeconomics and Agricultural Economics
, Jakub Staniszewski (WE / KMiGŻ)
Jakub Staniszewski,,
- Department of Macroeconomics and Agricultural Economics
Pages140-159
Publication size in sheets0.95
Book Conference Proceedings: VII International Scientific Conference "Determinants of regional development” Piła, Poland 12-13 April 2018, 2018, Państwowa Wyższa Szkoła Zawodowa im. Stanisława Staszica w Pile, ISBN 978-83-62617-89-0, 322 p.
Keywords in Polishbłąd złożenia, dochód rolniczy, FADN, dane panelowe
Keywords in Englishfallacy of composition, agricultural income, FADN, panel data
DOIDOI:10.14595/CP/01/010
URL http://web.pwsz.pila.pl/~pes/index.php/proceedings/article/view/173/139
Languageen angielski
Score (nominal)15
Score sourceconferenceIndex
ScoreMinisterial score = 15.0, 21-04-2020, ChapterFromConference
Publication indicators WoS Citations = 0
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