Psychological factors as triggers for futures trading adoption: evidence from German farmers
2025
Marius Michels | Oliver Mußhoff
Abstract Research has often attributed commodity futures contracts (CFC) adoption in agriculture to structural factors, such as farm size and education, linking low uptake to economies of scale and learning costs. We challenge this perspective by investigating psychological dimensions of farmers' decision-making, specifically examining response efficacy, self-efficacy, and response costs of CFCs as conceptualized in protection motivation theory (PMT). Through cluster analysis of survey data collected from 303 German farmers in 2024, we identify two psychological profiles with distinct adoption behaviors despite similar structural characteristics. Our findings suggest that psychological dispositions act as critical triggers for adoption, whereas structural factors create enabling conditions. Policy measures should address psychological barriers to enhance futures trading uptake in agricultural risk management.
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