A (recursive) multiple objective approach to analyse changes in the utility function of farmers due to policy reforms

Multi-criteria decision-making (MCDM) methodology is used to analyse shifts in the utility function of farmers due to policy changes. The presented approach is tested for a sample farm in the loamy region in Belgium. The utility functions under the situation before and after the CAP-reform are estimated and compared. This reveals that the change from price support to direct income support has decreased the relative importance of the risk objective, while the environmental objective, almost non-existent in the situation before 1992, is gaining importance. The example shows that the multi-objective methodology can be a useful framework for a better understanding of farmers' reactions on policy reforms. (C) 2001 Elsevier Science Inc. All rights reserved.