xt7g1j97803n https://nyx.uky.edu/dips/xt7g1j97803n/data/mets.xml   Kentucky Agricultural Experiment Station. 1958 journals 070 English Lexington : Agricultural Experiment Station, University of Kentucky Contact the Special Collections Research Center for information regarding rights and use of this collection. Kentucky Agricultural Experiment Station Progress report (Kentucky Agricultural Experiment Station) n.70 text Progress report (Kentucky Agricultural Experiment Station) n.70 1958 2014 true xt7g1j97803n section xt7g1j97803n  
Progress Report 70 September I958
• 9
Factors Influencmg Farmers
Choices of Products
By AN. Halter and J. W. Hubbard »
I Department of Agricultural Economics
umvmzsmr or KENTUCKY
AemcumuRAL Exmzmmtzm srnmow
. ugxmcrow

 FACTORS INFLUENCING FARMERS' CHOICES OF PRODUCTS
By A. N. Halter and J. W, Hubbard
Farm managers face the problem of deciding what crops to grow and what
livestock to produce. As managers, they niust decide what actions to take, when
to take them, and the vigor with which each action should be pursued.
Farm management has been of interest to "dirt farmers" in the United States
since the days when most "free" government land suitable for farming was settled.
It has been of interest to research workers in agriculture since the establishment
of the Land Grant College System, Farm management has been studied from dif-
ferent viewpoints and with different purposes in mi.nd. Some workers have been
interested in "what" a farmer does when h.e manages, as opposed to what he does
when he labors, Others have been interested. in "how" a farmer manages a partic-
. ular farm, or type of farm, Some workers have been stimul.ated by the desire to ‘
describe what managers do and how they do it in order to improve and extend the
body of knowledge concerning rnanagement; others have been interested in im-
proving the efficiency of farm managers, and thus, it is hoped, the incomes which _
they produce for themselves and their families froni the land, labor and capital.
which they employ, .
Johns on,L/ and workers who have been associated with him, have developed
the idea that there are five tasks, not necessarily separate and distinct in point
of time of performance, which managers do, They are tl,. observation, (.2} anal-
ysis, (3]+ decision making, (4) taking action, (H: accepting responsibility (economic
I and other types}, There are indications that these may not be the only jobs which
farrn managers do when they manage, e.g.. , recognizing a problem or undesired
set of circumstances may also be a task of management, This point will not be
developed here, but is suggested as a reminder that this is an area in which there
are still unanswered questions. l
‘ ln performing the tasks of observation, analysis and decision, the manager
attempts to become acquainted with the various alternative courses of action that
will attain. his goals, He may gather data that provide him with information about
the desirability and likelihood of the success of the alternatives, His analysis
will eliminate certain of the alternatives and his final. decision will fix upon one
course of action for him to follow,
Nature of the Study
This study is concerned with how farmers make a particular type of deci-
sion - the decision as to what products to produce and how much of each product
1/ G. L.. Johnson and C. B. Haver, Decision Making Principles in Farm Manage-
_ nient, Ky. Agr. Expq Sta, Bul. 593 (Lexington: 1953

 -g-
to produce, i. e., the proportions in which to produce the products selected.
The Interstate Managerial Studyg‘-/ obtained the data which formed the empirical
background for this study in 1954 by interviewing farmers in selected areas of
seven states. The states werer (ll Kentucky, (Zi Ohio, (3* Indiana, (ell Michigan,
(5) North Dakota, (6) Iowa, (7a Kansas. One hundred and seventy—two of these
farmers, selected at random, were asked, "COULD YOU PLEASE TELL ME
HOW YOU MADE UP YOUR MIND ABOUT lvl/HAT OR HOW MUCH OF EACH
PRODUCT TO PRODUCE THIS YEAR'?" In analysing the answers to this ques-
tion, the main concern was the procedure which was followed in arriving at the
decision. The specific content of the particular decision, such as to produce so
much milk, wheat, tobacco, etc , was ignored. After careful consideration, it
appeared that the farmers could be delineated into groups according to some of
the factors that they believed to be fixed or constant in their situation. These
fixed factors aid the decision maker in eliminating certain alternatives from the (
decision process.
Thus, on the basis of these common elements in their answers to the above E
question, the farmers were divided into seven "decision-model groups" (a niodel
is defined here as the boundary or guide for making decisions lv for purposes of
comparison as to other distinguishing traits..;3./ .
Decision Model. Groups l
The first group included all those who said that they were guided in their -
decisions as to what and how rnuch to produce by the- prices, or by the expected
prices, of the products which they could produce. There were 26 farmers in
this group. The second group appeared to have a very similar basis for their
decisions on what and how nam P to produce since they said that their income
and/or debt repayment needs guided their decisions on what and how mutt to
produce. There were I3 far mers in this group The third group of 17 farmers
included all those who said that government programs were responsible for their
production decisions. This was the only type of reason given by this group.
Group four was made up of far mers who said that their land and their cropping
patterns (rotation considerations . guided their decisions, and it also included
those farmers who listed the effects of governrnent allotments and programs, in
addition to their land and cropping patterns. This group included 26 farmers.
Thirty farmers who indicated that their livestock programs and the attending
feed needs dictated their production decisions were placed in group five. Group
six was comprised of 32. farmers who said the limitations and capabilities of
their land, in conjunction with their needs for feed to support their live stock
progranis, determined what products they produced. Group seven included 19
E/ For more details of this study see J. W. Hubbard, A Study of the Decision
Making of Farm Mana¤e rs in Relation to Outputs and Specific Inputs, (Un—
published M. S. thesis, Department of Agricultural Econornics, University
of Kentucky, 1957}
3/ One miscellaneous group, only nine farmers whose answers failed to indicate
- any elements in conirnon with either of the other seven groups, was eliminated
from this part of the analysis. l

 -3-
farmers who seemed to have more complex models for deciding what and how much
to produce than most of the other groups. A requirement for inclusion in this group .
was consideration of government allotments and programs as a major basis for de-
* ciding what to produce, but other minor factors such as land capabilities, livestock
programs, feed supplies, buildings, fences, and other real estate improvements
were included.
In order that the foregoing groups might be readily compared inthe following
sections, and in order that the reader might know which group was being dis- “
cussed, each group was given a name which was intended to convey, in abbre-
viated form, the primary inf1uence(s) on the production decisions of the group.
These names were
1) Price,
Z) Income and Debt,
3) Government,
4) Land and Government,
5) Livestock and Feed,
6) Land and Feed, and
7) Land, Livestock and Government.
The reader should note that these were not the only things considered by the
groups of farmers in their decisions on what and how much to produce, but that
their answers to the questions indicated that these were primary considerations
in each case. The group names will be used in the comparisons which follow.
Method of Analysis
The 163 farmers were divided into the above -named seven decision model I
groups for the purpose of testing an idea (hypothesis) which was held by the
writer regarding the relation between the different methods of arriving at solu-
tions to product combinations and certain other characteristics of the groups. _
_ This hypothesis was:
"lf farmers are limited by assuming different restrictions in deciding which
products to produce, and how much of each product to produce, there will be ob-
servable differences among them in relation to certain attributes such as age,
education, size and type of farm operated. "
lf this hypothesis is verified, i.e. , if examination of the seven groups reveals
that there are distinct or significant differences among them as to certain attri-
butes, the conclusion will be that if other groups of farmers are found who have
the same characteristics as one of the seven studied groups, these other groups
will employ similar models to decide what and how much to produce. Knowledge
of this type can be useful to teachers of farm management as an aid in presenting
principles of decision making to students, i.e. , different principles may apply
to different groups. Research workers may find this to be an extension of their
understanding of the choice making of men actively engaged in farming.

 -4- ·     .
The seven groups of farmers were compared as to age, amount of education,
size and type of farm, income, and other factors. The chi square statistical test
was used in making these comparisons .é/ The assumption underlying the use- of.
this statistical test was that if there were no relation between the- seven decision =
model groupings and the other factors by which the groups were compared, the .
farmers would be distributed randomly (purely by- chance) over the range of values I
of the other variable.;/ For example, if there were no relation between the mod-
els for decision discussed here and the variable, age, there presumably would be
no definite pattern to the age distribution of the 163 farmers. Brief discussions A
of nine of these significant attributes will be presented here.-(?-/
Age of Decision Makers
Age is a characteristic of people which is of interest to mos.t students of °
human behavior. While it may be that many other factors are related to the de-
cision model groups, ease of measuring make-s age an important variable fo-r pre-
dicting the actions of groups. Thus, the seven groups were compared as to- whether “
they were under 40, between 40 and 55, and 55. or older. The proportions of each
of the decision groups in each age range are shown. in Table. 1.
TABLE 1. — DISTRIBUTION OF FARMERS BY DECISION MODEL AND BY AGEé/
 
Ages
Decision 39. 9 or 40. 0- 5*5. 0. or Total -
_Model less 54. 9 over Percent
Price 34.6 53.9 11.5 10.0.0
Income and Debt 1.5.. 4 46.. 2 38..4 10*0.. 0
Government 29.4 _ 29.4 41.2. 100.0
Land and Government 28.0 40. 0 32.. 0 .100.0
Livestock and Feed 26.7 46.6. 26.7], 100.0
'Land and Feed 12.5 31.21 56.3 100.0
Land, Livestock and Government 63. 1 31. 6 5.. 3 100%. 0
_a_/ Chi square significant at less than one percent.
There was a larg_er proportion of the "Price" farmers in the 40- to 55-year
age range than in either of the other ranges. The "Price" group also had a higher
proportion of farmers in this age range than any of the other decision groups.
Only ll. 5 percent of the "Price" farmers were 55 years old' or older-. The largest
 
4/ The seven decision model groups were compared as to 35 other variable factors;
16 of these comparisons resulting in statistically significant departures from
random, or chance, distributions.
5/ G. W. Snedecor, Statistical Methods, (Ames, Iowa: Iowa State College Press,
1956}, pp. 18-34.
6/ If further details of the analysis are desired, see Hubbard, op. cit., Ch- IV.

 -5- . ·
proportion of the "Income and Debt" farmers, 46. 2 percent, were also found in
the 40- to 55-age group, but there were also 38.4 percent of this group in the 55
years and older class. The largest proportion of the "Government" decision _
group, 41.2 percent, were in the 55 or older group, with 29.4 percent being in
each of the other two age groups. The "Land and Government" and the "Live-
stock and Feed" groups were both concentrated heaviest in the 40- to 55-year
range, with 40. 0 percent and 46. 6 percent, respectively. The remaining farmers
in both of these decision groups were about equally divided between the under 40
and the over 55 age groups. The "Land and Feed" group was distinguished by
having a larger proportion of farmers in the over-55 age group and a smaller ’
proportion in the under-40 group than any of the other decision groups. The
"Land, Livestock, and Government" group exhibited a concentration which was
the reverse of that of the preceding group. This group had higher and lower pro-
portions of its members in the under-40 and over-55 age groups, respectively,
than any of the other decision groups. Thus, it would seem that there were dis-
tinct age difference among the seven groups.
The seven groups were also distributed significantly in relation to the length
of time which the members of the groups had spent operating farms for them-
selves. However, since this characteristic is thought to be closely associated
with age, it will not be discussed.
Decision Maker's Education
If education is effective, it would appear that it would influence the decision
making of individuals. The influence of the level of formal schooling attained by
the members of the seven decision groups on their production decisions.seemed
to be a logical inquiry. The distribution of the seven groups of education was
statistically significant, but oddly enough, not as highly significant as the age
distribution. {
The groups were compared (Table 2) on the basis of having completed (1) the _
seventh grade or less, (2) the eighth grade, (3) grades nine through eleven, and
(4) the twelfth grade or higher.
TABLE 2. — DISTRIBUTION OF FARMERS BY DECISION MODEL AND BY
EDUcAT1o1¤12/
 
Last Grade of School Completed
Decision 7th or 8th 9th- 12th or Total
Model less 11th higher Percent )
Price 11.5 26.9 23.1 38.5 100.0
Income and Debt 23.1 7.7 30.8 38.4 100.0
Government 18.7 18.7 31.3 31.3 100.0
Land and Government 26.9 38.5 23.1 11.5 100.0
Livestock and Feed 10.0 50.0 6.17 33.3 100.0
Land and Feed 21.9 34.4 12.5 31.2 100.0
Land, Livestock and Government 0. 0 15. 8 26. 3 57. 9 100. 0
al Chi square significant at 5 percent.

 -5-
The "Land and Government" group had a larger proportion of men who had
completed the seventh grade or less, and a smaller proportion who had com-
pleted the twelfth grade or niore, than any of the otlier groupsr The "Livestock
and Feed" group had a lar ger proportion A/ho had completed the eighth grade than
any of the other groups. The "Govern-men.t" group had the highest proportion who
lad completed nine through eleven, while the "Land, Live stock and Government"
gi oup exhibited a reverse tendency, having not only the highest proportion who
had completed the twelfth grade, but it also had no farmers who had conipleted as
little as the seventh grade, The "Government" group was distributed more nearly -
as the statistical model indicated that it would be, if the distribution had been _
rantdom, than any of the other decision groupsi A
Size of Farm
The acreage of the farm which a farmer operates is a characteristic which
is easy to deterrnine, but is farm size meaningfully related to the way in which
he decides what products to produce? The seven groups were classified as to
the proportions who operated: (1) farms less than 130 acres, (2] farrns 130 to ‘
269 acres, and (3} farms of 270 acres or more, Almost three-fourths of the
"Price" group were equally divided between farrnris of l3'i acres or less and lel.r`K1'1S
of 130 to 269 acres. The "lncome and Debt" farrners were found largely (69,2
percent) on the 130 to 269 acre farms, with the remaining 30, 8 _percent eq_·z;_al`l‘y ‘
divided between the srnaller and the larger si ze farms, The largest proportion
oi the farnqers in the "Governme¤nt" group a‘i8~8 percent, operated farrns of 270
acres or more The "Land and Government" and the "Livestock and Feed" groups
dir] not show extreme concentration in either of the farrn, size ranges, being about
equally divided. The heaviest concentration of the "Q!`»r·,r¤d and Feed" farmers
•43 8 nercent‘ was found :):1 the 130 to 269 acre farms, while only 25 percent of
M is gr »up operated far ms of 129 acres or less. Twice as many of the "Land,
., vestock and Government" farmers operated farrns of 270 acres or more as
\»p~— rated far ms of 129 acres or lessi
Mmm < oncentrations (at least 33 percent or over] as well as the ranking within
each farm size grouping are shown for the decison groups in Fig, l
Q Less than 130-269 Over 270
42 x 130 acres acres acres
Z3 E?]
O. ·y`  
2 5 Price Income &: Debt Governnient
Os Q i Livestock & Feedi Land. & Feed Land, Livestock & Govt.
QL   '"“`""`_—`—M__ Price Land & Government
ig Q Land & Govt, Livestock & Feed
ZL  
E `5   Q
Increasing Size of Farms
Fig. 1. - Sizes of Farnis Which the Decision Model Groups Operated

 -7-
Decision Makers' Types of Farms
When the information on which this study was based was obtained, the pro-
ducers of some farm products received price supports, while producers of other
products did not. Some products which had price supports were supported at
higher levels, relative to the cost of producing them, than others. With this
situation in mind, the seven decision groups were compared as to the degree of »
price support which the products they were actually producing received. The
combinations of products which the different farmers produced were grouped into
four price support classifications; (1) least support, (2) low intermediate, (3)
high intermediate, and (4) most support. The question here was, "Does the de-
gree of price support available for the products which they sell influence the way
farmers decide what and how much to produce'? " A significant relationship be-
tween the degree of price support available for the products of the seven decision
t groups and the reasons they gave for producing these products provided a kind of
reliability test for the decision niodel groups.
Farmers of four of the decision model groups were `found more often in the
` least price support category than in any other. These groups were (1) Income
and Debt, 69.2 percent; (Z) Land and Feed, 50.0 percent; (3) Price, 44.0 per-
cent; (4) Livestock and Feed, 41.4 percent. On the other hand, largest propor-
tions of the farmers who used the three other decision niodels produced combina-
tions of the products which had the highest price supports available. These groups,
and the proportions who produced products with most support, were (1) Land,
Livestock and Government, 63.2 percent; (2) Government, 56. 3 percent; (3) Land
and Government, 38.5 percent. The indication that such large proportions of
each of the three groups of farmers who included "Government" in their decision
models also produced products which had the highest level of price support pro-
vided evidence that the seven decision model groupings employed in this study are
logical groupings. This assumes that the activities of the government in support-
ing commodity prices were what these farmers considered when they made their
l production plans.
l Specialization Versus Diversification
The operations of some farmers are specialized for the production of one
product or a very few products, while the operations of other farmers are geared
to the production of numerous products. The farmers in this study were com-
pared to see whether any relation could be discovered between the type of deci-
sion mode1·employed to determine what to produce, and the operation of specialized
or diversified farms.
The following groups of farmers diversified their production: (l) Income
and Debt, 84. 6 percent; (2) Land and Feed, 81.2 percent; (3) Livestock and Feed,
79. 3 percent; (4) Price, 64.0 percent. Specialization was practiced by the largest
proportions of the two decision groups: (1) Land, Livestock, and Government,
63.2 percent; and (2.) Government, 56. Z percent. The farmers of the "Land and
Government" group were equally divided between specialization and diversification.

 -3-
Comparison of the decision groups as to the proportions in each group who
specialized in the production of some product (or products}, and as to the pro—
portions who produced products with what appeared to be the highest degree of
price support, revealed an interesting relation (Fig.   With only one exception,
the proportions of the groups who specialized and the proportions who produced
products with the highest degree of price support were arranged in the same _
order of magnitude, i. e., the group with the smallest proportion who specialized
was also the group with the smallest proportion who produced products with the
highest price support. The only exception to this ordering, referred to above,
resulted from the slightly larger proportion of the "Livestock and Feed" than of
the "Land and Feed" farmers (20. 7 percent and 18.8 percent, respectively) who
specialized. V
It seems likely that this relationship arose from the desire of the specializing
farmers to take advantage of available price supports, or the price supports may A
have influenced them to specialize. The three groups who featured government
in their decision models were found to be the three highest in proportions who
specialized and who received the most from price supports. It does not appear .
that such a relation arose from pure chance. An active resolve to take advantage
of the economic opportunities presented by price support programs appears to be
‘ a more logical explanation. Thus, the contention that the production decisions of l
farmers are not random, and that the seven decision groups are a logical arrange- .
ment, receives added support.
Decision Maker's Price Expectation
When farmers make plans to produce certain products, they are not certain
what the prices of the products will be at market time, except in those cases
whe re sales contracts have been made in advance. Even in this latter case there
is .nc·<-r’rainty as to the grade of the future products due to weather and other
factors and thus, some uncertainty as to the prices which will be received for
tlem. `ri spite of uncertainty, farmers have ideas regarding the prices which
the v are "most likely" to receive.
Since people are different, it seemed reasonable to conclude that different
far mer s would use different means of determining the product prices which they
regarded as "most likely" to prevail at a specified future date. The farmers
indicated that they used four general methods in arriving at their expected pro-
duct prices. Basically, the factors central to the four ways of estimating prices
appeared to be: (l) the supply of the product, (2) the supply of the product in
conjunction with the demand for it, (3T the supply of the product in conjunction
with miscellaneous other factors, and (4) government action. The supply of the
product was used for estimating price most frequently by the five decision groups:
(li Livestock and Feed, 64. 3 percent; (2) Income and Debt, 53. 8 percent; (3T
Land, Livestock and Government, 43. 8 percent; (4i Land and Feed, 40. O percent;
and (Bi Price, 38. 5 percent.
lf one were basing his price expectation on the traditional economic factors
of supply and demand then a prediction of both factors would be necessary for a

 -9-
Land, Live-
stock and
Government
I · Government _
· Land and
gl Government
is Z  .
N
I-'Z}
.5%
U .
aa Price
U1
ca ,
.2
  `
H Land and
:3 Feed
  Y
LQ
U')
‘ 3 Livestock
8 and Feed
$2}
"' -
Income
and Debt
Increasing Product Price Support
Fig. 2 - Apparent Relation Between Proportions of Decision Groups With
Specialized Enterprises, and the Degree of Price Support Available for their
Products.

 -10- T
single valued expectation, However, large proportions of the farmers said that
they considered supply alone, A single valued price expectation under these con-
ditions would be theoretically iniprobablei. Thus, either l§l_ the questions con-
cerning price expectations were not fully answered, or (Z th.e answers to the
questions that were asked have been improperly interpreted. lt appears that fur-
ther research would be necessary to clarify this point.
The farmers of the "Land and Government" group apparently attached equal
importance to supply, and to supply in conjunction with other factors, one third
of them using each. of these methods. The "Government" group differed from the
other groups since a large proportion of its members indicated that they were _
evenly divided between the supply-demand and the government action models as
bases for forming their expectations of future prices.
lnput Price Expectations
The seven decision groups were also compared as to the models used to
estimate the future price of sorne important itiem which tley bought regularly ‘
for use in their farm businesses These items, which included such things as
feed, fertilizer, fuel, and seed, are referred to in this study as inputs, since y
they are bought and "put into" the farm. operation lt was lvpotlresized tlcat the
kind of product a farmer produces influences the way he forniulates his input ‘
price expectations These input price expectations are important for determin-
ing the qu.a..ntities and combinations of innuts tlrat will be used in producing the
products
There seemed to be five central factors, or groups of factors, considered
by these men in estiniating the future prices of these inputs Their answers
indicated that these things were not always tre same type of things which they
considered when they estimated. product prices The important factors con- .
sidered in this connection seemed to be tl supply of the input, l2` supply of the
input ll'! conjunction with the dernand. for it, t3 demand for the input, as a sole
tiinsidl-—l—at:on. i4 production cost iincluding such things as the cost of strikes
and of monopoly conditions in business] and ic various "noncommodity" con-
siderations such as the presence of inflation or deflation. in the economy or of
nrena · ation for war Since the level. of statistical. significance attached to the
distribution ofthe seven decision groups was not as high for the input price ex-
pectation models as it was for the product price expectation niodels the Zfl per-
cent level for inputs versus the 5 percent level for products , this distribution
will not be discussed in detail However, there were indications that there were
distinct differences in tlie ways used by the different decision groups to estimate
future input prices
Decision Maker Considered Enterprise Expansion
in an attempt to discover how farrners det ide whether it would be profitable
to expand an enterprise, the men intemxie ,~ec’   ‘l .s stzidv were asked how they
would figure the profit wnict ther would expect. to receive if they expanded a hog

 -11-
enterprise, They were given information as to the cost of producing the addi-
tional litters and the income which might be expected: This cost and income in-
formation was presented in two forms and the farmers were asked which of the
two they would use in solving the expansion problem, One of the methods involve
figures which gave for all litters the average costs and returns which could be
expected per litter, while the other gave the costs and returns expected from »
each additional litter. The purpose of this question was to deterrnine the extent
to which farmers think in incremental or "marginal" terrns. Since this is a dif-
ferent kind of problem from that constituting the central core of this report, there
is no reason to expect the farmers to behave similarly in the two situations.
The answers of the decision groups indicated that substantially larger pro-
portions of every group used some method other than the average and the marginal
_ Tmethods of deciding whether to increase the scale of a hog enterprise. The
"Government" group, 17 6 percent; the "‘Land, Livestock and Government"
group, 15.. 8 percent; and the "Land and Government" group, 11.5 percent had
the largest proportions who used the average figures to decide whether to expand
such an enterprise,. The "Price, " the "Livestock and Feed, " and the "Land,
Livestock and Government" groups, with 19.2, 16.7, and 15. 8 percent, respec-
tively, had the largest proportions who indicated that they used the marginal cal-
culations. The "Livestock and Feed" group with 13 , 3 percent, and the "Land,
Livestock, and Governnient" group with 15 8 percent, had the largest proportions
who said that they used both the average and the marginal methods.
' A decision maker who uses the marginal or additional approach could be
characterized as one who is attempting to "maxin1ize" some quantity, e.g. , profit,
satisfaction, etc. The decision niaker who uses the average approach might be {
described as one who is not maximizing but is attempting to find an "acceptabl.e"
solution to his probleni. Even though sniall proportions of the different decision V
groups used either of the above approaches, it niay be significant that those groups
· which featured price, incorne or livestock were the "niaxiniizers". Siniilarly,
there may be significance in the fact that the groups which mentioned governrnent
tended to be "averagers".
In light of the fact that a large proportion apparently could not be character-
ized as "maximizers" or "averagers", it can only be concluded that 11; the ques-
tion was improperly worded, (Z~ improperly interpreted by the respondent, or
13f the answers were inconipletely understood 1/
Decision Maker Commits Errors
lt has been suggested that there are two kinds of errors which managers can
make in choosing among alternatives Errors of the first type are conimitted
when actions which should have been taken are not taken, and errors of the second
7/ While the question which fornis the basis of this report was open—ended, The
"expansion of a hog enterprise" question was structured Perhaps an open-
ended or probing type question should have been used in the expansion problem

 -l2- ·
type arise from actions that should not have -been taken Thus, Type l errors in-
volve losses of potential profits which are not realized dim to failure to invest, ~or
to take some other action. Type 2 errors, on the other hand, involve actual losses
of investments which should not have been made, The farmers who cooperated
in this study were asked which type of error they regarded- as most irnportant.
Their answers were used in an effort to d.etermine whether the seven groups rdif-
fe red markedly in their attitudes toward mistakes,
lt had been observed that the decision groups which featured government in
their production choices had also tended toward- specialization and high price sup-
ports More complete understanding of the observed relationships between be-
havior and decision ·models may be dependent upon knowledge of certain basic per- .
sonality traits such as attitude toward making mistakes In the above case, it was
hypothesized that the decision groups who depended on government wouldattach
more importance to Type 2 errors, ie , taking action when they should· not, than `
they did to Type l» errors. It also appeared likely that thesesame groups would
stress Type 2 errors to.a greateridegree than the otherrdecisionrgroups, ·
The "'Land, Livestock and Government" group had a largerrproportion who I
were more concerned about Type l errors than about Type 2, or who thought
both types equally important. The "Government" and the "Land and Government" »
groups had largerproportxions who were more concernedabout Type.2 errors
than about Type l or who expressed equal. concern. Furthermore, the three l
groups who considered government had higher proportions who stressed Type .2
errors than any of the other groups The "lncome and Debt" group, with 41..7
percent in each category, was evenly divided between; —more concerniabout Typeil
errors and equal concern about both types The t"Price, " the "Livestock and
Feed" and the "Land, Livestock, and Feed" groups all h.ad larger proportions
who said that they were equally concerned about both error types than who were
niore concerned about either Type l or Type 2 The findings were thought to
agree with the above hypothesis
lmplications of the Findings
it appears that a sufficient number of group differences were observed lin
the studx which has been outlined above to justify a tentative conclusion that th.e
seven decision model groupings were logical ar rangements. From such a