the effect of household wealth on fertiliser use in the presence of uncertainty abstractprevious studies of wealth effect on fertiliser use have produced mixed results on the direction of the impact our article looks at this issue from a different perspective by considering the presence of doubts such as about the true content or general effectiveness of fertiliser we show theoretically that there could be different responses between the high wealth and low wealth farmers we analyse also the wealth effect empirically using household panel data from the hebei province of china the results indicate that the direction of wealth effect does indeed change across the different levels of farmers wealth

on the measurement of risk aversion from experimental data attitudes towards risk are measured for households in northern zambia using an experimental gambling approach with real payoffs that at maximum were equal to 30 of average total annual income per capita the results of the experiment show decreasing absolute risk aversion and increasing partial risk aversion determinants of risk aversion are investigated using random effects interval regression model exploiting the panel data structure of the repeated experiments wealth indicator variables are found to be significant and partial relative risk aversion decreases as wealth increases females are found to be more risk averse than males

empirical estimation and use of risk preferences discussion in 1976 a number of people present today attended a conference in mexico which has since then 1978 resulted in a state of the arts volume edited by roumasset boussard and singh on risk uncertainty and agricultural development the papers presented today convey the feeling that since that time there has been little progress in measuring risk aversion or in discriminating between alternative theories of behavior under risk i will argue that this is because the papers concentrate on approaches to measurement of risk aversion and testing of theories which hold little promise of fast progress please excuse that i will be somewhat partisan in the remarks and rely heavily on studies with which i have been involved i know them best

linking risk aversion time preference and fertilizer use in burkina faso this paper investigates whether burkinabe maize farmers fertilizer use decisionsare correlated with their risk and time preferences we conducted a survey and a se ries of hypothetical experiments on a sample of 1 500 farmers we find that morepatient farmers do use more fertilizer but it is only because they plant more maize afertilizer intensive crop rather than because they use more fertilizer per hectare ofmaize planted conversely we find no statistically significant link between risk aver sion and fertilizer use we use a simple two period model which suggests that riskaversion may indeed have an ambiguous effect on fertilizer use

credit as insurance in agrarian economies abstract this paper examines consumption credit as an insurance mechanism in agrarian economies it explains the more rapid adoption of new technology in the green revolution by large farmers who had greater access to consumption credit the paper also demonstrates how the emergence and expansion of consumption credit markets by mitigating the need for hoarding in order to meet consumption contingencies enhances growth by encouraging investment

risk aversion and credit constraints in farmers decision making a reinterpretation in 1976 the agricultural development council sponsored a conference on risk uncertainty and agricultural development which has been summarised in a volume edited by james roumasset jean marc boussard and inderjit singh 1979 the volume provides an excellent review of the state of the art at that time however as discussed in the summary chapters of that volume there were few theoretical empirical or policy issues on which clear conclusions could be reached on the basis of knowledge then available in the intervening years progress has been made on a number of issues as a result of both empirical investigations and theoretical advances this paper concentrates on advances which have relevance to the controversy about the relative roles of risk aversion and credit constraints in limiting farmers investment levels especially for purchased inputs such as seeds or fertilizers in particular we review recent experimental studies on the extent of risk aversion among farmer populations in developing

economic relationship between access to land and rural poverty in nepal in the present socio economic structure of nepal land is the main source of income and consumption for the majority of nepalese this study analyses the economic relationship between access to land and poverty in nepal by establishing the link between land and consumption as well as land and income a generalised additive model gam and ordinary least squares ols demonstrate that greater access to land increases income and consumption of the household and thereby reduces poverty the significant marginal value of land for both consumption and income implies that an effective land reform policy could well be an effective approach to alleviate rural poverty however land reform must come as part of a larger overhaul cluster analysis shows that land reform should target appropriate subgroups within the community in order to differentiate those who would make use of the extra land from those who would not and apply appropriate strategies to each subgroup it reveals the importance of subgroups in determining an appropriate strategy for tackling poverty

inter vivos transfers and bequests in three oecd countries reforms reducing the generosity of pensions have distributional effects on future generations if individuals care about their descendants welfare but only affect elderly individuals if bequests are the unintentional result of precautionary savings and safety net programmes such as unemployment insurance may displace sources of private help such as that provided by living parents to their children in need this paper provides comparable measures of how expected bequests and transfers vary with cumulated parental earnings in the united states west germany and the united kingdom the strength of bequest motives is empirically very weak in the available data private inter vivos transfers which appear to depend on the recipients economic situation are partly crowded out by public unemployment insurance programmes together involuntary bequests and intentional inter vivos transfers appear to be an important channel of intergenerational inequality transmission and strengthen substantially the relationship between an individual s and his parents economic status ernesto villanueva

rural finance and agricultural technology adoption in ethiopia does the institutional design of lending organizations matter summary it has now become almost a stylized fact that sustained agricultural growth is central to rapid poverty reduction and economic development yet world poverty is largely concentrated in the agrarian societies which have the potential for agricultural productivity growth this is particularly true for sub saharan african countries where the gaps between potential and actual yields remain high minimizing this gap through the promotion of modern inputs such as fertilizer and modern seeds has been at the core of almost all development strategies in ethiopia among other initiatives the country has promoted microfinance institutions and member owned financial cooperatives to alleviate credit constraints of the smallholder farmers this paper analyzes the impacts of these institutions using household survey data and a propensity score matching technique we examine the effects that institutional financial services have on farmers adoption of agricultural technology in ethiopia the results suggest that access to institutional finance has a significant positive impact on both the adoption and extent of technology use however when impacts are disaggregated by type of financial institution and farm size heterogeneities are observed in particular financial cooperatives have a greater impact on technology adoption than microfinance institutions and the results appear to vary depending on farm size and types of inputs the paper concludes with implications for policies to promote adoption of modern agricultural inputs

insurance market efficiency and crop choices in pakistan this paper tests the efficiency of insurance markets in the pakistan punjab by examining how crop choices are affected by the presence of price and yield risk we estimate reduced form and structural models of crop choices although we cannot reject the hypothesis that village members efficiently share risk among themselves production choices are shown to depend on risk existing risk sharing and selfinsurance mechanisms thus imperfectly protect punjab farmers against village level shocks results also indicate that households respond to consumption price risk thereby suggesting that empirical and theoretical work on risk should avoid putting an exclusive emphasis on yield and output price risk

the effect of ambiguous risk and coordination on farmers adaptation to climate change a framed field experiment the risk of losses of income and productive means due to adverse weather can differ significantly among farmers sharing a productive landscape and is of course hard to estimate or even guesstimate empirically moreover the costs associated with investments in reduced vulnerability to climatic events are likely to exhibit economies of scope we explore the implications of these characteristics on farmer s decisions to adapt to climate change using a framed field experiment applied to coffee farmers in costa rica as expected we find high levels of risk aversion but even using that as a baseline we further find that farmers behave even more cautiously when the setting is characterized by unknown or ambiguous risk i e poor or non reliable risk information secondly we find that farmers to a large extent coordinated their decisions to secure a lower adaptation cost and that communication among farmers strongly facilitated coordination

an mcdm analysis of agricultural risk aversion abstract in modelling farm systems it is widely accepted that risk plays a central role furthermore farmers risk aversion determines their decisions in both the short and the long run this paper presents a methodology based on multiple criteria mathematical programming to obtain relative and absolute risk aversion coefficients we rely on multiattribute utility theory to elicit a separable additive multiattribute utility function and estimate the risk aversion coefficients and apply this methodology to an irrigated area of northern spain the results show a wide variety of attitudes to risk among farmers who usually exhibit decreasing absolute risk aversion and constant relative risk aversion

pay as you go social security and the distribution of altruistic transfers this paper studies the impact of an unfunded social security system on the distribution of altruistic transfers in a framework where savings are due to both life cycle and random altruistic motivations we show that the effect of social security on the distribution of these transfers depends crucially on the strength of the bequest motive in explaining savings behaviour we measure this strength by the expected weight that individuals attach to the utility of future generations on the one hand if the bequest motive is strong then an increase in the social security tax raises the bequests left by altruistic parents on the other hand when the importance of altruism in motivating savings is sufficiently low the increase in the social security tax could result in a reduction of the bequests left by altruistic parents under some conditions on the attitude of individuals toward risk and on the relative returns associated with private saving and social security some implications concerning the transitional effects of introducing an unfunded social security scheme are also discussed

access to capital and agrarian production organisation there are two problems both universal that entrepreneurs in any economy must contend with firstly an agent generally has access only to a limited amount of working capital secondly workers hired by an agent are subject to moral hazard and this necessitates their supervision this paper models for an agrarian economy the constraints imposed on entrepreneurs activities by these two problems and endogenously determines the various organisational forms of production as well as the allocation of resources that will obtain with a simple model we endeavour to explain a diverse set of empirical observations pertaining to the less developed countries in terms of the general processes that determine the distribution of income among the various agents and the hierarchical relationships that develop among them agricultural production typically involves a period of several months between the time the inputs are purchased and the time the output is marketed access to working capital and hence to the credit market thus plays an important role in a farmer s production decisions the distribution of access to credit in turn tends to be an important determinant of income distribution in poor agrarian economies credit is invariably rationed according to the ability to offer collateral the amount of working capital a farmer can mobilise therefore depends on the amount of land he owns which is often a good proxy for his overall wealth and thus his ability to offer collateral further since hired hands have a propensity to shirk they need to be supervised and therefore the

is risk aversion really correlated with wealth how estimated probabilities introduce spurious correlation economists frequently focus on correlations between wealth and risk preferences but rarely observe the probabilities needed to test this relationship empirically these unobserved probabilities are typically estimated via profit or production functions conditioned on wealth correlates which may leave statistical fingerprints on subsequently estimated risk aversion coefficients and confound correlations between wealth and risk preferences using data from an experiment with observable probabilities we compare risk aversion coefficients based on true probabilities with those based on probabilities estimated using standard approaches and show how estimated probabilities can change risk aversion coefficients substantially and introduce spurious correlation between risk aversion and wealth

how strong are bequest motives evidence based on estimates of the demand for life insurance and annuities this paper presents new empirical evidence in support of the view that a significant fraction of total saving is motivated by the desire to leave bequests specifically i find that social security annuity benefits significantly raise life insurance holdings and depress private annuity holdings among elderly individuals these patterns indicate that the typical household would choose to maintain a positive fraction of its resources in bequeathable forms even if insurance markets were perfect evidence on the relationship between insurance purchases and total resources reinforces this conclusion

law of one price in international commodity markets a fractional cointegration analysis the law of one price lop is an important component of most if not all international trade models because this assumption allows researchers to use a single representative price for all regions this paper examines the long run lop for international commodity prices using a generalized notion of cointegration called fractional cointegration this analysis is applied to nine pairs of price series supporting the existence of lop in eight cases

using field experiments to elicit risk and ambiguity preferences behavioural factors and the adoption of new agricultural technologies in rural india abstractwe conduct a series of experiments in rural india in order to measure preferences related to risk loss and ambiguity by combining these results with a discrete choice experiment over new and familiar rice seeds we demonstrate how these behavioural parameters affect decisions to adopt new agricultural technologies especially when the new technologies are risk reducing we find that risk averse and loss averse individuals are more likely to switch to new seeds demonstrating risk reducing characteristics while contrary to expectations ambiguity averse individuals are no more willing to retain their status quo than switch to cultivating the new variety

a heterogeneous agent model of credit linked index insurance and farm technology adoption abstract protection from downside risk is a determinant of technology uptake among subsistence agricultural households access to credit insurance and savings may stimulate technology adoption where new methods are riskier but higher yielding or require sunk costs in this paper we employ a dynamic stochastic heterogeneous agent model where farm households have access to contingent credit and make savings technology and loan repayment choices our approach is novel as insurance is modeled as a meso level product where the bank is indemnified before any payouts are distributed to borrowers thus it accounts for both supply and demand side concerns showing a flow of effects when index insurance contracts are sold to risk aggregators for whom basis risk is lower results show letting the lender lay first claim on indemnities lowers default which can decrease interest rates and expand credit access insurance and savings may also spur technology uptake

a hierarchy model of associative farming abstract acceptance of the need for complementary services when agrarian reform is introduced such as credit and technical assistance has led many countries in latin america to organize land reform projects into collectives or production cooperatives but the disincentives to effort inherent in group farming have been a continual source of underproduction and disappointment with cooperative farming experiments the paper suggests an intermediate farming structure currently successful in the dominican republic in the framework of an agency contract incorporating the hierarchical relations between beneficiary administrator and governing agency the advantages of the associative over either individual or collective farming are illustrated

collateral free lending with risk contingent credit for agricultural development indemnifying loans against pulse crop price risk in india this article addresses the problem of collateral free lending in the context of agricultural development we investigate a viable alternative to traditional credit products through the development of risk contingent credit for operating loans and farm mortgages and apply the concept to agricultural loans for pulse crops in india risk contingent credit mitigates business and financial risk by reducing debt obligations depending on the embedded commodity options whose payoffs are linked with commodity price fluctuations we analyze daily commodity spot prices for pulse crops in india and show how risk contingent structured financial instruments can be priced in practice

family ties and the crowding out of long term care insurance insurance for long term care ltc has developed only moderately compared to other areas of welfare which has been explained variously as the result of market failures public misconceptions of the risk of ltc needs and intergenerational contracts this paper offers a cultural explanation for the limited ltc insurance development in europe it argues that family ties by enhancing informal care giving duties inhibit individuals expected public and private insurance coverage the empirical analysis of the paper exploits cross country and sub group variability of a representative database of european union member states containing records on ltc coverage and family structure drawing upon two measures of familistic culture or family ties we find a negative association between family ties and expected coverage of ltc for different sub samples these results are robust to a set of checks for different definitions of family ties and controls and for a sub sample of first and second generation migrants policy implications suggest that widespread expansion of ltc coverage might need to accommodate existing familistic cultural norms to avoid insurance crowding out

insurance credit and technology adoption field experimental evidence from malawi this brief summarizes the insurance credit and technology adoption field experimental evidence from malawi the farmers were offered loans for the november 2006 planting season does production risk suppress the demand for credit the author implemented a randomized field experiment to ask whether provision of insurance against a major source of production risk induces farmers to take out loans to adopt a new crop technology the study sample was composed of roughly 800 maize and groundnut farmers in malawi where by far the dominant source of production risk is the level of rainfall the author randomly selected half of the farmers to be offered credit to purchase high yielding hybrid maize and groundnut seeds for planting in the november 2006 crop season the other half of farmers were offered a similar credit package but were also required to purchase at actuarially fair rates a weather insurance policy that partially or fully forgave the loan in the event of poor rainfall surprisingly take up was lower by 13 percentage points among farmers offered insurance with the loan take up was 33 0 percent for farmers who were offered the uninsured loan there is suggestive evidence that reduced take up of the insured loan was due to farmers already having implicit insurance from the limited liability clause in the loan contract insured loan take up was positively correlated with farmer education income and wealth which may proxy for the individual s default costs by contrast take up of the uninsured loan was uncorrelated with these farmer characteristics

microenterprise finance is there a conflict between growth and poverty alleviation abstract microenterprise finance has generated enormous enthusiasm among aid donors and nongovernment organizations ngos as an instrument for reducing poverty in a manner that is financially self sustaining although something of a consensus has emerged concerning the principles by which such institutions should be designed however we know little about their impact the paper reports on a research project which estimated the impact of 13 microfinance institutions in seven developing countries on poverty and other target variables and attempted to relate such impact to the institutions design features for each of the institutions studied the impact of lending on the recipient household s income tended to increase at a decreasing rate as the recipient s income and asset position improved a relationship which can easily be explained in terms of the greater preference of the poor for consumption loans their greater vulnerability to asset sales forced by adverse income shocks and their limited range of investment opportunities there are significant outliers to this general pattern in particular very poor people who have been able to achieve significant loan impact but they are the exception rather than the rule and the relationship is significant at the 1 level for all the institutions studied except the malawi mudzi fund this relationship defines in the short term an impact frontier which serves as a tradeoff lenders can either focus their lending on the poorest and accept a relatively low total impact on household income or alternatively focus on the not so poor and achieve higher impact the position and slope of the estimated impact curve vary however with the design of the institution for well designed schemes impact at all levels of income is higher than for ill designed schemes hence for many lender institutions the tradeoff can often be moved by appropriate innovations in institutional design in particular modifications to savings loan collection and incentive arrangements for borrowers and staff

do farmers choose to be inefficient evidence from bicol abstract farming households that differ in their ability or willingness to take on risks are likely to allocate resources and effort among income producing activities differently with consequences for productivity in this paper we measure voluntary and involuntary departures from efficiency for rice producing households in the bicol region of the philippines we take advantage of a panel of observations on households from 1978 1983 and 1994 available monthly weather data and survey information on planting times allows us to create household specific measures of weather shocks which we use in our analysis we find evidence that diversification and input choices do affect efficiency outcomes among farmers although these effects are not dominant accumulated wealth past decisions to invest favorable market conditions and propitious weather are also important determinants of efficiency outcomes among bicol rice farmers our findings suggest that the costs of incomplete formal and informal insurance markets are higher for poorer farmers

is there too much hype about index based agricultural insurance abstract individual crop insurance has been largely abandoned in developing countries and replaced by insurance pilots based on weather indices these pilot schemes have encountered low demand research suggests that better off farmers may already be insured via income diversification their assets and social networks and may achieve profit maximising portfolios without formal insurance contracts they would be interested in such contracts only if they reliably reduced their exposure to risk at lower costs than their self insurance mechanisms conversely poor farmers are not able to self insure adequately have to trade off returns for reduced risk and could therefore benefit from a well designed insurance but they are cash credit constrained and therefore cannot advance the money before sowing time to buy insurance that pays out only after the harvest index insurance therefore cannot be scaled up even if a few farmers purchase it governments still will need to run relief programmes for the un

production risk and optimal fertilizer rates a random coefficient model risk as an impediment to progress is a recurrent theme among development practitioners wharton galbraith lipton in the context of the new rice technology it has been argued that the full potential of modern varieties mvs has not been realized because year toyear variability in crop response has caused farmers to use less than the economically optimal level of inputs barker et al over the years a growing body of literature has emerged quantifying the effect of risk aversion on input use particularly fertilizer the evidence is conflicting and the controversy continues while moscardi and de janvry and ryan and perrin conclude that risk aversion substantially lowers input levels roumasset and rosegrant and herdt show that the low observed levels of input use cannot be attributed to risk

how does risk management influence production decisions evidence from a field experiment weather is a key source of income risk especially in emerging market economies this paper uses a randomized controlled trial involving indian farmers to study how an innovative rainfall insurance product affects production decisions the authors find that insurance provision induces farmers to invest more in higher return but rainfall sensitive cash crops particularly among educated farmers this shift in behavior occurs ex ante when realized monsoon rainfall is still uncertain the results suggest that financial innovation can mitigate the real effects of uninsured production risk

role of risk sharing and transaction costs in contract choice theory and evidence from groundwater contracts empirical modeling of contract choice has been problematic because routine large scale surveys do not contain sufficient information on matched partners and on contractual terms this paper is based on a primary level survey of groundwater contracts in india we discuss several different measures for riskiness and transaction costs and use them to test for alternative theories of contract choice although the risk sharing explanation has been most popular in the theoretical literature it is not found to be significant the data are more consistent with a double sided incentive model where the need for giving proper incentives to the buyer and the seller determines contract choice

intergenerational transfers production and income distribution abstract we consider an overlapping generations economy where the aggregative production process uses physical capital and human capital intergenerational transfers from parents to their children are motivated by altruism we distinguish between two types of transfers investment of parents in the education of their offspring and capital transfer the gift bequest motive we show that the intensity of each type of altruism and hence the composition of the two types of transfers affect significantly the equilibrium output and the intragenerational income distributions comparing competitive equilibria from the same initial distributions of capital transfers and human capital we derive a the economy with the higher education inclined altruism attains lower output and more equal intragenerational income distributions if either the production function s elasticity of substitution is not large or the altruism is weak b for more bequest inclined altruism the effects are usually reversed c under public provision of education higher bequest inclined altruism results in lower output and less equal distribution of income in all dates

risk sharing versus low cost credit systems for international development low cost credit programs in developing countries have failed to achieve agricultural technology adoption goals this research attributes the failure to the inabiiity of poor farmers to bear the combined business and financial risks p sed ly adopting new technologies and develops proposals for the design of credit programs that reduce these risks agronomic and socioeconomic data are combined through simulation and mathematical programming to analyze problems of decision making under risk for developing countries the results will assist iii the design of new rural financial institutions conducive to the adoption of new production technologies by subsistence

debt poverty and resource management in a rural smallholder economy this paper develops a model to capture the key features of poverty credit constraints and resource management faced by poor rural households we assume that due to the existence of asymmetric information and moral hazard the household faces an increasing cost of credit as its debt equity ratio rises a household exploiting a natural resource may fall into a poverty trap but only if it is unable to afford the increasing borrowing costs implied by increasing debt to allow it to avoid such a trap or if it discounts future utility so much that a balanced growth path cannot be financed at any level of long run borrowing in contrast along an optimal balanced growth path the household s asset wealth purchased inputs resource stock and consumption increase at the same constant rate however over the long run there may be carrying capacity limits that prevent the resource from improving further the household may then direct its savings to accumulating financial assets and eventually under certain conditions may become a net creditor with resource exploitation becoming a less and less important source of its income

a century long perspective on agricultural development this article strategically surveys the past century s literature on agricultural development we organize the discussion around three grand themes that reveal the richness of agricultural development as an intellectual endeavor first we explore the role of agriculture in the broader development process from a macroeconomic and political economy perspective we then examine the role of technological and institutional change in successful agricultural development finally the focus turns to a microeconomic perspective on agricultural household decision making and the problems of imperfect and missing markets asymmetric information and transactions costs that lead to widespread apparent inefficiency and disequilibrium

time to change what to sow risk preferences and technology adoption decisions of cotton farmers in china this paper examines the role of individual risk attitudes in the decision to adopt a new form of agricultural biotechnology in china i conducted a survey and a field experiment to elicit the risk preferences of chinese farmers who faced the decision of whether to adopt genetically modified bt cotton a decade ago in my analysis i expand the measurement of risk preferences beyond expected utility theory to incorporate prospect theory i find that farmers who are more risk averse or more loss averse adopt bt cotton later farmers who overweight small probabilities adopt bt cotton earlier

productivity credit risk and the demand for weather index insurance in smallholder agriculture in ethiopia the article explores the relationship between fertilizer use and the demand for weather index insurance wii among smallholder farmers in ethiopia we examine whether fertilizer use is profitable under current smallholder production conditions whether risk related factors affect fertilizer use and we estimate the returns to inputs in the agricultural production function in the absence of insurance we then study how these primitives of agricultural production functions relate to insurance demand the study compares a survey based estimate of willingness to pay with actual uptake for the weather insurance finding the stated and actual demand to be almost completely uncorrelated while those with high marginal returns to inputs say they would purchase insurance only those with low marginal returns actually do consistent with the stated purpose of the product as input insurance insurance demand proves to be highly responsive to the existence and amount of randomly allocated insurance vouchers jel classifications c83 g22 q12

the effects of pensions on household wealth a reevaluation of theory and evidence this paper examines the extent to which households offset pension wealth with reductions in other wealth systematic econometric biases imply that the estimated offsets in previous empirical studies are smaller than the true offset and may even have the wrong sign new empirical estimates that do not correct for the biases generate little offset between pensions and other wealth estimates that correct for the biases show substantially more offset a smaller impact of pensions on overall saving than in most previous studies the estimates also indicate that the effects of pensions on wealth vary significantly across households

the role of education in facilitating risk taking and innovation in agriculture the impact of education on farmers attitudes toward endogenous risk measured using an attitude survey instrument is estimated with household data from rural ethiopia education of the household head is found to decrease risk aversion next the effects of education and risk attitudes on technology adoption are estimated schooling encourages farmers to adopt innovations whereas risk aversion reduces the probability of adoption thus we find that schooling encourages innovation a potentially risky undertaking not only directly but also indirectly through its effect upon attitudes toward risk to the extent that educated farmers are early innovators and are copied by those with less schooling as other research on the same data has shown the reduction of riskaversion not only has private benefits for those with education but also may have externality benefits

productive efficiency of specialty and conventional coffee farmers in costa rica accounting for technological heterogeneity and self selection a steep decline in coffee prices at the producer level led to considerable pressure for farmers in costa rica and producer countries all over the world one possible reaction was moving to specialty markets where price pressure was perceived to be lower we use original survey data from 2002 2003 and 2003 2004 to analyze the factors influencing participation in specialty markets and to estimate separate production functions for specialty and conventional coffee farmers allowing for farm specific inefficiencies applying a sample selection framework we find significant selection bias in the sub sample of specialty farmers and evidence for the overestimation of efficiency if this bias is not adequately controlled for among the most important factors that influence farm specific efficiency levels in the two sub samples are the availability of additional income activities experience in coffee cultivation and membership in cooperatives based on the results we derive policy recommendations to improve farmers production performance and ability to cope with the effects of the coffee crisis these policy measures include the provision of extension services with respect to farm management skills the creation of income opportunities in rural areas and the support of farmer owned cooperatives

household s risk attitudes in indonesian villages this paper estimates attitudes towards risk using data obtained through interviews of 400 households in villages in indonesia participants were invited to play investment games in order to identify household risk attitudes the game result supports the hypothesis of non decreasing partial relative risk aversion using an ordered probit model the determinants of risk attitude were investigated the results show that the variable of co residence is important an individual living with his or her parents is less risk averse than an individual in a nuclear household co residence can be viewed as a type of security blanket partial relative risk aversion decreases with the level of education and wealth

does inequality lead to greater efficiency in the use of local commons the role of strategic investments in capacity abstract this paper examines how inequality in access to credit affects the strategic behavior of users of a common resource in their investment and extraction decisions a dynamic two stage game is developed in which agents choose the level of sunk investment in capacity and the consequent extraction path the results show that agents invest in excess capacity except when inequality is very high the relation between inequality and efficiency in resource extraction is found to be non monotonic with the steady state resource stock being closest to the optimal level when either inequality is very high or very low

equilibrium credit rationing of small farm agriculture it is often argued that externally imposed contractual restrictions lead to inequitable credit rationing this paper argues that unrestricted laissez faire markets may also inequitably ration credit a formal model which grants borrowers autonomy in credit application and use demonstrates that adverse incentive and selection effects may cause banks to endogenously impose interest rate restrictions and ration small farms out of the credit market consequently liberalization of financial markets may be insufficient to guarantee small farms access to credit

financial market efficiency in an agrarian economy microeconometric analysis of the pakistani punjab the shadow price of capital in production is a useful indicator of the efficacy of the rural financial system using data on participants and non participants in a small farm credit programme from the pakistani punjab this article estimates the shadow price of capital endogenous switching regressions techniques are employed to control for the likely heterogeneity of borrowers versus non borrowers results indicate that an individual selected at random from the population of small farmers would experience a 200 per cent rate of return on the first rupee borrowed from the small farm credit programme indicating a high shadow price of capital and a prima facie case for small farm credit programmes

the credit market and rural development a model of a land resettlement scheme abstract many markets in developing countries are imperfect and governments often attmept to eliminate imperfections the policy implications of completing an incomplete market have not however been considered theoretically in the literature this paper fills the gap using a model of the credit market in a land resettlement scheme the major conclusion contradicts a common assumption of the credit rural literature namely that freely available credit will achieve development objectives opening the credit market will contribute to broad objectives such as increasing the options available to settlers but it will not necessarily achieve narrower objectives such as raising the output of a particular crop