Sivalai V. Khantachavana

Bio: Sivalai V. Khantachavana is an academic researcher from Cornell University. The author has contributed to research in topics: Household income & Livelihood. The author has an hindex of 5, co-authored 8 publications receiving 119 citations.

Risk rationing and the demand for agricultural credit: a comparative investigation of Mexico and China

Abstract: Purpose – The purpose of this paper is to determine the extent of risk rationing among potential rural borrowers in Mexico and China. Design/methodology/approach – Using primary survey data from 730 farm households in the Shaanxi province of China and from 372 farmers in northeastern Mexico, the authors investigate factors associated with risk rationed, price rationed and quantity rationed farmers. The survey was instrumented to self-identify borrower typologies. In addition the authors created within the survey a discrete-choice credit demand build to determine borrower credit demand elasticities. The analysis applies a linear probability which the authors found to be consistent with multinomial and binary logit models. Findings – The authors find in China the incidence of risk rationing in farmers to be 6.5, 14 percent for quantity rationed and 80 percent for price rationed. In Mexico, 35 percent of the sample is risk rationed, 10 percent quantity rationed and 55 percent price rationed. The results from...

On the Transaction Values of Land Use Rights in Rural China

Abstract: Land Use Rights (LURs) in China affect farmers’ productivity through investment incentives and the way land is allocated across households. LURs have implication and trade-offs between equity and growth. This paper examines how Chinese farmers might respond if the Chinese government made it legal for farmers to buy or sell LURs. The current policy direction in China is ambiguous and not at all settled. Reports in 2008 and 2009 indicated that the China would indeed allow farmers to sell LURs while simultaneously extending the rights to 70 years. However in 2010/2011 there appeared to be some rescission in the policy directions, perhaps as a result of needing to rethink how disassembling the current policy would conflict with managed growth in planned urbanization. Modern economics would suggest that tenure security and land ownership would encourage agricultural investment and enhance rural economic growth, but the economic reality in China’s agricultural economy is too complex to accept this outcome as a matter of course. Livelihood choices, labor substitution, market infrastructure, a lack of property right protections, entrepreneurship, bureaucracy, and political will are all influential factors that will determine whether such a program would work. The purpose of this paper is to examine the economics of transaction in LURs, estimate the value at which LURs could transact in equilibrium, and to analyze factors that would affect these price changes. We evaluate farmer’s intention to buy and sell LURs and how much they are willing to pay and receive for LURs.

Empirical Challenges for Risk Preferences and Production

Abstract: The importance of risk preferences in agricultural production has long been identified as an important and preeminent issue of policy relevance. Recent developments in the study of production risk have called into question much of the core of risk production research. This article provides an overview of the prominent literature attempting to quantify the impact of risk preferences on production and a discussion of the recently discovered challenges. These challenges are typified by (a) an inability to discern risk preferences, (b) an inability to discern the factors that relate to risk preferences, (c) evidence that prior estimation has severe problems, and (d) a general failure of current models to address the important policy or behavioral issues. Although some of these challenges may appear at first blush to be insurmountable, we suggest a new agenda for risk research in production that directly addresses each of these issues.

Risk Rationing and the Demand for Agricultural Credit

Abstract: The purpose of this paper is to provide a specific test of the Boucher, Carter and Guirkinger (2008) framework to determine the extent of risk rationing amongst potential rural borrowers. Using data from 730 farm households in the Shaanxi province of China and from 372 farmers in northeastern Mexico, we investigate factors associated with risk rationed, quantity rationed and price rationed farmers. The analysis applies both a linear probability and logit model. We find in China the incidence of risk rationing in farmers to be 6.5%, 14% for quantity rationed and 80% for price rationed. In Mexico, 35% of our sample is risk rationed, 10% quantity rationed and 55% price rationed. Our results from China support the hypothesis that financial poor are more likely to be quantity rationed; in Mexico however, the level of education is found to be important in determining quantity rationed. In both countries, asset wealthy farmers are less likely to be risk rationed; however, income doesn’t appear to have an impact. We provide evidence that the elasticity of demand for credit is different among the three groups of farmers: risk rationed, quantity rationed and price rationed. Risk aversion and prudence are significantly correlated with risk rationing in China, while only risk aversion is significant in Mexico. Our results suggest that efforts to enhance credit access must also deal with risk and risk perceptions. With some exceptions, our investigation supports the theoretical model presented in Boucher, Carter and Guirkinger (2008).

Precautionary Saving in the Small and in the Large

Abstract: The theory of precautionary saving is shown in this paper to be isomorphic to the Arrow-Pratt theory of risk aversion, making possible the application of a large body of knowledge about risk aversion to precautionary saving, and more generally, to the theory of optimal choice under risk In particular, a measure of the strength of precautionary saving motive analogous to the Arrow-Pratt measure of risk aversion is used to establish a number of new propositions about precautionary saving, and to give a new interpretation of the Oreze-Modigliani substitution effect

Farmer Behaviour as Reasoned Action: A Critical Review of Research with the Theory of Planned Behaviour

Abstract: In many countries farmers face pressure to adopt practices to promote sustainability and resilience while ensuring efficient business management to produce food and other agricultural products at reasonable cost. Given a policy context in which voluntary action is preferred over government regulation, understanding farmers’ motivation to embrace recommended practices has become a major subject for research. Increasingly, this endeavour is guided by the theory of planned behaviour, a reasoned action approach (Fishbein and Ajzen, 2010). We provide a brief overview of the theory of planned behaviour and an elaboration of good practices in the assessment of the theory’s constructs. We systematically review 124 applications of the theory to farmer behaviour on a number of specific review criteria. Based on observations of improper use, we consider theoretical and methodological issues and provide recommendations for research design and data analysis.

Agricultural credit and technical efficiency in Ghana: is there a nexus?

Abstract: Purpose – The purpose of this paper is to examine the impact of agricultural credit on technical efficiency of Ghanaian maize farmers using a unique dataset drawn from the database of Sub-Saharan Africa’s intensification of food crops agriculture (Afrint II) in 2008 period. Design/methodology/approach – In this study, a two-stage estimation procedure is employed to determine impact of agricultural credit on technical efficiency of Ghanaian maize farmers. The first stage utilized probit model while the second stage utilized stochastic frontier approach to estimate impact of credit on technical efficiency of Ghanaian maize farmers. Findings – The study found that farmers are producing below the frontier with average technical efficiency of 47 percent. Policy variables such as credit access; education, extension access and farm size played a stronger role in technical efficiency. Agricultural credit in particular increased technical efficiency by 3.8 percent. Research limitations/implications – The results s...