Organic farming


Farm level adaptation to a changing economic environment is often slower than expected at first sight. For instance, technological innovations are frequently adopted at a later date than the net present value of investment is insinuating. This can be explained by the dynamic decision model of the new investment theory which consistently accounts for uncertainty, sunk costs and the flexibility of investment timing. Its essential conclusion is that - due to temporal opportunity costs - critical cash flows which trigger investments might be higher than those needed for simple cost recovery. Hence, an ostensible reluctance to invest (economic hysteresis) can be explained. In this research project, we analyse how the slow conversion to organic farming can be explained by the new investment theory.


Principal Investigators
Mußhoff, Oliver Dr. agr. (Details) (Agricultural Farm Management)

Duration of Project
Start date: 04/2004
End date: 03/2007

Last updated on 2020-10-03 at 16:42