Behavioural economics and decision theory application in agricultural entrepreneurship promotion

摘要

The Dissertation “Behavioural Economics and Decision Theory Application in Agricultural Entrepreneurship Promotion” consists of four Papers.ududPaper I “Behavioural Economics Application in Agricultural Entrepreneurship Promotion” proves the importance of entrepreneurship in agriculture promotion and demonstrates the shortcomings of the existing instruments of agro-business motivation. It also shows the limitations of existing literature on entrepreneurship and the low explanatory power of neoclassical models in entrepreneurship theory. The Paper justifies the Behavioural Economics (BE) application in agricultural entrepreneurship motivation and considers how the BE approaches can be implemented in agricultural entrepreneurship promotion. The Paper reveals negative consequences of the biased perception of the agricultural sphere and opens a discussion on possible ways of potential entrepreneurs perception biases avoidance. The Paper proves importance of diversification of hereditary and non-hereditary entrepreneurs, describes possible ways of NUDGE Theory application, stresses the importance of non-pecuniary factors in entrepreneur’s decision making process and suggests indirect agro-entrepreneurship promotion methods through consumers.ududPaper II “Policy Effect on Entrepreneurial Decision Modeling and Entrepreneurship Criteria Сlassification” main goals were to model a policy effect on entrepreneurial decision and to create a classification of entrepreneurship criteria applicable in experiment devoted to policy effectiveness assessment. The Paper divides the entrepreneurial determinants classifications into two groups, according to the perspective: Policy Maker’s or Decision Maker’s. The differences between two perspectives decrease the effectiveness of policies aimed at motivation of entrepreneurship in Agriculture. The Decision Maker’s perspective can also be divided into Factors and Gains subgroups. The final decision is made based on the Gains consideration. Applying top-down and bottom-up approaches, using existing literature on entrepreneurship criteria and Maslow hierarchy of needs and his later works, a new classification of entrepreneurship Gains was created and consists of pecuniary and non-pecuniary factors: Realisation, Freedom, Belonging, Social Preference and Esteem. udThe classification was checked by applying it to 120 reasons of choosing entrepreneurial career, described by real entrepreneurs. 116 out of 120 reasons were allocated to one of the criteria groups. Part III would apply the created classification of gains in the experiment devoted to analysis of effectiveness of non-financial approaches to Agro-sphere promotion. udThe model of a Policy Effect on Entrepreneurial Decision was also created in Part II. The Policy Effect is modeled, applying Average Treatment Effect formula. The Paper suggests different approaches to outcome variable depending on the Decision Maker. The hereditary farmer’s decision to become entrepreneur should be modeled as a binary variable, while the non-hereditary entrepreneur’s decision should be modeled as a discrete variable. According to a third approach, the outcome variable can be modeled as a continuous variable, with a value from 0 to 100, which represent the Attractiveness score of the Agricultural sphere of entrepreneurship. The continuous variable shows a change in perception of the Agricultural sphere Attractiveness.udIn the model, the continuous outcome variable is calculated as a sum of criteria performance multiplied by the criteria weight. The model, created in Part II includes the minimum level of performance of alternative on criterion, the biased perception of alternative performance, the risks and the difference in the criteria importance among different groups of individuals.udududPaper III of the Thesis “Promotion of Entrepreneurship in Agriculture. Experiment on Non-Pecuniary Method.” is based on the model of a Policy Effect on Entrepreneurial Decision and list of Entrepreneurial Decision criteria, created in the previous Part. The experiment results indicate that the non-financial approach to Agricultural entrepreneurship promotion has a significant effect on the average Attractiveness of the sphere and increases the number of interviewees, who evaluate the Agricultural sphere as the most attractive among the six suggested alternatives. The increase in the average Attractiveness score of the alternative “Agriculture” can be explained by the average increase in perceived performance of alternative on a number of criteria, what proves a stable effect of the Treatment on the Agricultural sphere perception. An assumption that the Treatment has a debiasing effect on the Agricultural sphere perception was made, based on the Paper II conclusions and assumption that perceived performance of the Agro-sphere is underestimated. udThe experiment also shows that interviewees, who evaluated the Agricultural sphere as more attractive, gave lower importance to the financial criterion Income. The negative correlation between the level of Attractiveness of the Agro-sphere and Income importance as well as the absence of correlation between the sphere Attractiveness and sphere performance on financial criterion also proves that Income is less important for potential entrepreneurs in Agro-sphere than for those who are more attracted by other business spheres. The background data analyses shows that the participants from smaller cities as well as those who consume organic products find the Agricultural sphere more attractive. The regression model, based on the experiment results, shows that the classification of entrepreneurial decision criteria can be applied in the experiment and predicts the level of Attractiveness of a business sphere.udududPaper IV presents a survey conducted in a form of interviews with 30 non-hereditary entrepreneurs in the sphere of Agriculture and 30 entrepreneurs from urban spheres of business. The survey provides several important conclusions and observations. Firstly, the importance of financial criteria is significantly lower for the Agricultural entrepreneurs. Secondly, Rural entrepreneurs value Freedom and Social preference (altruism, sustainability, social responsibility) more than Urban entrepreneurs. The significant correlation between Realisation and Esteem importance for entrepreneurs in Agriculture assumes a considerable social component in entrepreneurs’ perception of self-realisation. Also entrepreneurs in Agriculture are more devoted to their business sphere, than urban entrepreneurs. The follow-up questions revealed that entrepreneurs in Agriculture tend to apply the satisficing rule to financial determinants. The application of satisficing approach to Income might be a factor, which significantly decreases the agricultural business development.