Application of Latent Class Analysis (LCA) in the assessment of farmers’ behavior on the market of financial services and products – example from Poland

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The objective of the paper was to evaluate the behavior of farmers in the utilization of financial services and products through the application of Latent Class Analysis (LCA). The study was conducted on a group of farmers in Central Pomerania, Poland. The data set comprised 150 farms, obtained from the pilot study conducted in 2023 using the CATI (Computer-Assisted Telephone Interview) survey technique based on an interview questionnaire. The research findings demonstrated the applicability of Latent Class Analysis in the assessment of farmers’ behavior in the market of financial services and products. The use of this method for unique survey results is innovative and contributes to the development of research on farmers’ financial decisions. The research identified three distinct groups of farmers. Group 1 is comprised of farmers who exhibit a high degree of caution in their utilization of financial services and products. Group 2 comprises farmers who are active in the market of financial services and products. In contrast, Group 3 represents those farmers who, in terms of their behavior on the market of financial services and products, take relatively high risks. The calculations were performed using the R statistical program with the poLCA package. Intelligent information systems are of high importance for the advancement of research in the evaluation of the behavior of farmers in the use of financial services and products, since they allow the identification of cause-and-effect relationships and the evaluation of the impact of individual variables on the phenomenon under study.