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)
Download (61kB) | Preview
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.
|Item Type:||MPRA Paper|
|Original Title:||An Ordered Probit Model Analysis of Transaction Costs and Market Participation by Small-Holder Cassava Farmers in South-Eastern Nigeria.|
|Keywords:||Ordered Probit, Transaction Costs, Market Participation and Cassava|
|Subjects:||D - Microeconomics > D2 - Production and Organizations > D23 - Organizational Behavior ; Transaction Costs ; Property Rights
D - Microeconomics > D2 - Production and Organizations > D21 - Firm Behavior: Theory
D - Microeconomics > D2 - Production and Organizations
|Depositing User:||B.C Okoye|
|Date Deposited:||23. Oct 2010 00:25|
|Last Modified:||30. Dec 2015 22:38|
Agwu, A.E and Anyaeche, C. L (2007) Adoption of Improved Cassava Varieties in six rural Communities of Anambra State, Nigeria. Academic Journals (African Journal of Biotechnology) 6(2): 089-098.
Arega, D.A, Manyong V.M., Omanya G., Mignouna H.D., Bokanga M., Odhiambo,G.D (2007) Smallholder Marketed Surplus and Input Use under Transactions Costs: Maize Supply and Fertilizer Demand in Kenya. AAAE Conference Proceedings pp125-130
Bellemare, M., & Barrett, C. B (2006). “An Ordered Tobit Model of Market Participation: Evidence from Kenya and Ethiopia.” American Journal of Agricultural Economics 88: 324-337.
Cogan, J.F (1981). “Fixed Costs and Labor Supply” Econometrica 49: 945-963.
de Janvry, A and Sadoulet, E (2005). “Progress in the modeling or rural households’ behavior under market failures.” In A. de Janvry and R. Kanbur, eds. Poverty, Inequality and Development, Essays in Honor of Erik Thorbecke. Kluwer publishing, Chap. 8.
Ezedinma, C and Okechukwu, R (2007). Cross-Border Trade in Cassava-Based Products in Dawanau Market, Kano, Nigeria. In: Ezedinma, C., Sanni, L and Okechukwu, R. (eds). 2007. Socioeconomic Studies on Selected Cassava Markets in Nigeria. International Institute of Tropical Agriculture, Ibadan, Nigeria. 53 pp.
Green, W.H (2000). Econometric Analysis. International Edition (4 Ed). New York University. Prentice Hall International, Inc.
Hobbs, J.E (1997). “Measuring the Importance of Transaction Costs in Cattle Marketing.” American Journal of Agricultural Economics 79: 1083–95.
Holloway, G. J., Nicholson, C.F., Delgado, C., Staal, S and Ehui, S (2000). Agro-Industrialization through Institutional Innovation, Transaction Costs, Cooperatives and Milk Market Development in the East African Highlands. Agricultural Economics, 23: 279-288
Holloway, G., Barrett, C.B and Ehui, S (2005). “The Double-Hurdle Model in the Presence of Fixed Costs.” Journal of International Agricultural Trade and Development 1:17–28.
Lapar, M. L., Holloway, G. and Ehui, S (2003). Policy Options Promoting Market Participation among Small-Holder Livestock Producers: A Case Study from Philippines. Food Policy 28:187-211
Makhura, M.T (2001). Overcoming Transaction Costs Barriers to Market Participation of Smallholder Farmers in the Northern Province of South Africa. A PhD Dissertation submitted to the Department of Agricultural Economics, Extension and Rural Development Faculty of Natural and Agricultural Sciences University of Pretoria, Pretoria. 182pages
NAERLS and NFRA (2009). Annual Agricultural Performance Survey Report of Nigeria: 2009 Wet Season. NAERLS Press ISBN: 978-978-904-447-4. 134p
NPC (2006). National Population Commission.stimated Population Figures. Abuja: National Population Commission of Nigeria.
Sadoulet, E and de Janvry, A (1995). Quantitative Development Policy Analysis. Baltimore: John Hopkins University Press.
Sadoulet, E., de Janvry, A and Benjamin, C (1996). “Labor Market Imperfections and Selective Separability in Household Models: A Predictive Typology of Mexican Ejidatarios.” Working Paper No. 786, Department of Agricultural and Resource Economics, University of California at Berkeley.
Sadoulet, E., de Janvry, A and Benjamin, C (1998). “Household Behavior with Imperfect Labor Markets.” Industrial Relations 37:85–108.
Vakis, R., Sadoulet, E and de Janvry, A (2003). “Measuring Transactions Costs from Observed Behavior: Market Choices in Peru.” CUDARE Working Papers, Department of Agricultural and Resource Economics, University of California Berkeley, USA.