The role of non-pecuniary benefits in the labour allocation decision of farmers.

Abstract

Previous research has primarily focused on the impact of economic variables in explaining the off farm labour allocation decisions of principal farm operators. This study finds attitudes regarding the non-pecuniary benefits associated with the farming lifestyle also significantly affect behaviour by acting as a strong disincentive to farmers towards working off farm. This may suggest that even if economic returns are greater in the offfarm labour market, farmers may not supply additional labour off farm. We also employed separate models of off-farm labour market participation and off-farm labour supply and found certain variables such as a farm operator’s age and the level of diversification undergone by the farm business affect off farm labour market participation and hours supplied differently.