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An Ordered Probit Model Analysis of Transaction Costs and Market Participation by Small-Holder Cassava Farmers in South-Eastern Nigeria.

Okoye, B.C and Onyenweaku, C.E and Ukoha, O.O (2010): An Ordered Probit Model Analysis of Transaction Costs and Market Participation by Small-Holder Cassava Farmers in South-Eastern Nigeria. Published in: Nigerian Agricultural Journal , Vol. 41, No. 2 (18. October 2010)

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Abstract

The Ordered Probit model analysis procedure was applied to determine the factors (related to fixed and variable transaction costs) influencing the decision to participate in cassava markets by a sample of 360 smallholder farmers in South-Eastern Nigeria. Participation decisions revealed that membership of cooperatives or social organizations, farming experience and marketing experience had a positive relationship with decision to be autarkic other than buyer and seller other than autarkic and significant at 1.0% level of probability. The coefficients for frequency of extension contacts, age, native of community, road conditions to the nearest town and yield were also positive and significantly related to decision to be autarkic other than buyer and seller other than autarkic at 5% level of probability. The coefficient for access to communication facilities was positive and significantly related to decision to remain autarkic other than buyer and seller other than autarkic. The coefficients for education, distance to the nearest town, distance from the farm to the market and crop transportation were negative and significantly related with the decision to remain autarkic other than a seller and buyer other than autarkic at 1% level of probability. The coefficient for gender was positive and significantly related to decision by female farmers to be autarkic other than buyer and seller other than autarkic. These decisions to participate as a buyer, seller or remain autarkic were as a result of fixed and proportional transaction costs associated with participating in the market.

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