ON THE INCLUSION OF NATURE AND ITS DYNAMICS IN FARMERS' OBJECTIVE FUNCTIONS FOR ECO-SYSTEM SERVICES PROVISION: A NEW STRATEGY IN BIO-ECONOMIC MODELING
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Because objectives influence behavior, there should be thoughtfulness of economists on stating objective
functions. In contrast, most farm economists work with the assertion that farmers maximize
income. A major question is, are there alternatives? It is the aim of this paper to get a deeper insight
into deliberations on objective functions. We go beyond income maximization and show how a probabilistic
approach on life-styles provides better insight. We suggest the use of probabilities, humans
face if they do not know the status in which they live. Labor intensive and nature providing farming is
contrasted with intensive, eco-system service extracting farming and put into a dynamic bio-economic
approach. Life-styles occur with probability π and (1-π). The occurrence is modeled dynamically
making probabilities endogenous. A programming approach is suggested to depict behavioral equations
of life-styles. Finally, we discuss how farmers, by the help of an eco-system services planner,
learn and change probabilities.