Academic journal article Agricultural and Resource Economics Review

Internet Access and Internet Purchasing Patterns of Farm Households

Academic journal article Agricultural and Resource Economics Review

Internet Access and Internet Purchasing Patterns of Farm Households

Article excerpt

The Internet is becoming an increasingly important management tool in production agriculture. Using data from the 2004 Agricultural Resource Management Survey (ARMS) and a double-hurdle estimation approach, we explore the adoption of computers with Internet access by and Internet purchasing patterns of farm households. Adoption of the Internet is positively related to age and education of the operator, off-farm work, presence of spouse, participation in government programs, farm size, and regional location of the farm. Internet purchasing patterns of farm households are positively related to the education of the operator and spouse, presence of teenagers, and regional location of the farm. Finally, farm businesses and their households are more likely to purchase a greater percentage of non-durable goods through the Internet as distances to markets increase.

Key Words: adoption of Internet, education, farm size, farm households, Internet, doublehurdle model, farm business, major household items, minor farm inputs

(ProQuest: ... denotes formulae omitted.)

The Internet is a strategic technology that is used across all sectors of the economy (Cohen et al. 2001). Farming and other agriculture-related industries are no exception (Kinsey 2001). While participation in federal government programs is only one reason that America's farmers use the Internet, it is perhaps the primary reason for an increased interest in Internet use among farmers.1 While data available from the USDA's Agricultural Resource Management Survey (ARMS) does not include information regarding farmers' electronic program participation, it does enable researchers to evaluate the ability of farmers to access the Internet from their homes and/or business locations.2 It is important to note that the value of the Internet extends beyond its role in farming and economic activity to include the social realm as well. The Internet permits the formation of online (virtual) communities and access to cultural and social networks beyond an individual's locality (Wellman et al. 1996). As a social entity, a family farm consists of a dual organizational structure-a farm business and a household consisting of the farm operator and family members. The implication for Internet adoption is that in addition to the farm business, the Internet has many uses for the farm household.

According to the U.S. Census Bureau, approximately 62 percent of U.S. households own a computer and nearly 75 percent of U.S. households with a phone line have access to the Internet (Nielsen// NetRatings 2004). The Internet has steadily penetrated rural areas in recent years, and more than half of rural adults-52 percent-now go online (Mishra and Park 2005). Rural residents are enthusiastic users of the Internet and were early adopters of this technology-45 percent of rural residents go online daily.

Previous studies have focused on computer adoption by farmers and Internet adoption/use by farmers (Putler and Zilberman 1988, Batte, Jones, and Schnitkey 1990, Ortmann, Patrick, and Musser 1994, Mishra and Park 2005). Other studies have examined computer and/or Internet adoption and its impact on economic performance of the farm business (Lazarus and Smith 1988, Willimack 1989, Batte 2005). Internal factors such as record-keeping, decision-making, and production processes are some of the reasons for computer adoption by farmers (Holt 1985). External factors such as Internet research and marketing might also play an important role through the growth of information that has competitive value (Feder and Slade 1984). For example, farmers can use the Internet to search for input supplies and to locate potential buyers of their products, increasing their efficiency (via true market conditions). Wojan (2003) noted-but did not empirically evaluate- the potential benefits from farmers' Internet use.

The adoption of computers with Internet access may be due to several factors; for example, presence of a spouse who is working off the farm, the number of adult children who are exposed to Internet technology in schools, and off-farm businesses owned by farm operators and/or spouses that use the Internet to market and advertise their business's products to potential clients. …

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