The Nature of the Diversified Farm Household

This paper presents a theoretical approach that explains farm household diversification decisions by the relative attractiveness of both food production and family businesses. The empirical analysis of diversified activities of Swiss farm households shows that a low household income leads to diversification by off-farm activities, while a high income leads to diversification by on-farm activities. It is also shown that arable farms, mountain farms and farm households with a non-agricultural education are more likely to enter off-farm activities.