Agriculture Reference
In-Depth Information
Analysis of Production and Consumption of Organic Products in South Africa
http://dx.doi.org/10.5772/58356
2
r
bar
1
= - é
lnL K lnL
/
ù
.
(7)
ë
û
b
o
Where K is the number of parameter estimates in the model (degrees of freedom)
For the experimental gambling approach, the utility function with Constant Partial Risk
Aversion (CPRA) is used to get a unique measure of partial risk aversion coefficient for each
game level. This depicted as the equation below:
(
)
( )
S c
-
1
S
U
=
1
-
.
(8)
Where
S=
coefficient of risk aversion, and
c=
certainty equivalent of a prospect.
The Herfindahl Index (DHI) is used to calculate enterprise diversification and represent the
specialization variable. Although, this index is mainly used in the marketing industry to
analyze market concentration, it has also been used to represent crop diversification [35, 36].
Herfindhal index (DHI) is the sum of square of the proportion of individual activities in a
portfolio. With an increase in diversification, the sum of square of the proportion of activities
decreases, so also the indices. In this way, it is an inverse measure of diversification, since the
Herfindhal index decreases with an increase in diversification. The Herfindhal index is bound
by zero (complete diversification) to one (complete specialization).
N
(
)
=
å
2
Herfindhal index DHI
s
(9)
i
i
=
1
Where
N=
number of enterprises and
s
i
=value share of each
i-th
farm enterprise in the farm's output.
s
i
=
x
i
1
x
i
is the proportion of
the
i-th
activity in acreage / income.
4. Results and discussions
4.1. Determinants of adoption of organic farming
The summary statistics in Table 1 show that the average age of the farmers was over 50 years
with younger people migrating to urban centres in search of better jobs. In the study area, most
of the men are engaged in wage employment at the neighbouring sugarcane farms or as
