Investigating determinants of agricultural income diversification: an exploratory case study in Tuscany

This paper investigates on-farm income diversification determinants, using data from the Italian 2010 census. The determinants are investigated by simulating farmers’ behaviors as a two-step process through the application of the Heckman sample selection model. Model results are quite consistent with previous literature findings and confirm the relevance of risk exposure reduction as on-farm diversification strategy determinants. Results stress also that, besides farm characteristics and structures, spatial location and distances play a prominentrole in explaining the diversification process. Our results seem contrary to the demand-driven effects of diversification but stress that diversification could be considered a broader process driven by territorial potentiality and quality.