Farm-Specific Factors Affecting the Choice Between Conventional and Organic Dairy Farming

Organic dairy farming in the Netherlands is a growing sector. This paper investigates the impact of a number of economic and farm-specific variables on the choice between conventional and organic farming. Based on expected utility maximisation, a theoretical framework is developed that explicitly accounts for the impact of non-economics variables like age and education level and unobserved characteristics. The model is estimated with an unbalanced panel of Dutch dairy farms using a random effects probit specification.