An Investigation of Significant Factors Influencing Western Australian Wool Producers to Produce Wool: A Structural Equation Modelling Approach

Why Australian wool producers remained in the business despite the hardship they have experienced for much of the 1990s from low prices of wool? This question was raised frequently by research scientists and policymakers of the wool industry. A recent exploratory study gives a notion that Australian wool production could be a 'lifestyle' choice and/or a choice other than economic reasons. To validate this notion this paper investigates the factors that drive and motivate the Western Australian wool producers, as identified in the exploratory study, by applying a Structural Equation Modelling approach. An innovative mixed research method is adopted in this study. Telephone survey is conducted among a random selection of 290 wool producers in WA. The results suggest that despite some expectations lifestyle factor is not significant in influencing WA wool producers to produce wool. Income, input factor and personal motivation are significant predictors of wool production by WA wool producers. Implications of the results are discussed