IDEAS home Printed from https://ideas.repec.org/a/eee/deveco/v160y2023ics0304387822001031.html
   My bibliography  Save this article

Locking crops to unlock investment: Experimental evidence on warrantage in Burkina Faso

Author

Listed:
  • Delavallade, Clara
  • Godlonton, Susan

Abstract

Warrantage is an innovative model of rural finance with the potential to overcome credit, crop storage, and behavioral constraints through a localized inventory credit system. Using a randomized controlled trial varying household level access to warrantage, we measure its impacts among households interested in participating. Among treated households, take-up of storage is high, while credit take-up is moderate. Treated households primarily store grains sell their production over an extended period, at a time when prices are higher resulting in higher sales revenue. Increased incomes are spent on long-term investments, including education, livestock, and agricultural inputs for the subsequent year.

Suggested Citation

  • Delavallade, Clara & Godlonton, Susan, 2023. "Locking crops to unlock investment: Experimental evidence on warrantage in Burkina Faso," Journal of Development Economics, Elsevier, vol. 160(C).
    • Handle: RePEc:eee:deveco:v:160:y:2023:i:c:s0304387822001031
    DOI: 10.1016/j.jdeveco.2022.102959
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0304387822001031
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jdeveco.2022.102959?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Pascaline Dupas & Dean Karlan & Jonathan Robinson & Diego Ubfal, 2018. "Banking the Unbanked? Evidence from Three Countries," American Economic Journal: Applied Economics, American Economic Association, vol. 10(2), pages 257-297, April.
    2. Esther Duflo & Michael Kremer & Jonathan Robinson, 2011. "Nudging Farmers to Use Fertilizer: Theory and Experimental Evidence from Kenya," American Economic Review, American Economic Association, vol. 101(6), pages 2350-2390, October.
    3. Delavallade, Clara & Dizon, Felipe & Hill, Ruth Vargas & Petraud, Jean Paul, 2015. "Managing risk with insurance and savings: Experimental evidence for male and female farm managers in West Africa:," IFPRI discussion papers 1426, International Food Policy Research Institute (IFPRI).
    4. Christiaensen,Luc & Kaminski,Jonathan & Christiaensen,Luc & Kaminski,Jonathan, 2014. "Post-harvest loss in Sub-Saharan Africa -- what do farmers say ?," Policy Research Working Paper Series 6831, The World Bank.
    5. Dean Karlan & Robert Osei & Isaac Osei-Akoto & Christopher Udry, 2014. "Agricultural Decisions after Relaxing Credit and Risk Constraints," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(2), pages 597-652.
    6. Kate Ambler & Alan de Brauw & Susan Godlonton, 2018. "Measuring postharvest losses at the farm level in Malawi," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 62(1), pages 139-160, January.
    7. Kate Ambler & Alan de Brauw & Susan Godlonton, 0. "Cash Transfers and Management Advice for Agriculture: Evidence from Senegal," The World Bank Economic Review, World Bank, vol. 34(3), pages 597-617.
    8. Delavallade, Clara & Dizon, Felipe & Hill, Ruth Vargas & Petraud, Jean Paul, 2015. "Managing risk with insurance and savings : experimental evidence for male and female farm managers in the Sahel," Policy Research Working Paper Series 7176, The World Bank.
    9. MkNelly, Barbara & Kevane, Michael, 2002. "Improving Design and Performance of Group Lending: Suggestions from Burkina Faso," World Development, Elsevier, vol. 30(11), pages 2017-2032, November.
    10. Shane Frederick & George Loewenstein & Ted O'Donoghue, 2002. "Time Discounting and Time Preference: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 351-401, June.
    11. Abhijit Banerjee & Esther Duflo & Rachel Glennerster & Cynthia Kinnan, 2015. "The Miracle of Microfinance? Evidence from a Randomized Evaluation," American Economic Journal: Applied Economics, American Economic Association, vol. 7(1), pages 22-53, January.
    12. Kazianga, Harounan & Udry, Christopher, 2006. "Consumption smoothing? Livestock, insurance and drought in rural Burkina Faso," Journal of Development Economics, Elsevier, vol. 79(2), pages 413-446, April.
    13. Susan Godlonton & Manuel A Hernandez & Mike Murphy, 2018. "Anchoring Bias in Recall Data: Evidence from Central America," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 100(2), pages 479-501.
    14. Pamela Jakiela & Owen Ozier, 2016. "Does Africa Need a Rotten Kin Theorem? Experimental Evidence from Village Economies," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 83(1), pages 231-268.
    15. Abhijit V. Banerjee & Esther Duflo, 2007. "The Economic Lives of the Poor," Journal of Economic Perspectives, American Economic Association, vol. 21(1), pages 141-168, Winter.
    16. Abhijit Banerjee & Dean Karlan & Jonathan Zinman, 2015. "Six Randomized Evaluations of Microcredit: Introduction and Further Steps," American Economic Journal: Applied Economics, American Economic Association, vol. 7(1), pages 1-21, January.
    17. Basu, Karna & Wong, Maisy, 2015. "Evaluating seasonal food storage and credit programs in east Indonesia," Journal of Development Economics, Elsevier, vol. 115(C), pages 200-216.
    18. Günther Fink & B. Kelsey Jack & Felix Masiye, 2020. "Seasonal Liquidity, Rural Labor Markets, and Agricultural Production," American Economic Review, American Economic Association, vol. 110(11), pages 3351-3392, November.
    19. Pascaline Dupas & Jonathan Robinson, 2013. "Why Don't the Poor Save More? Evidence from Health Savings Experiments," American Economic Review, American Economic Association, vol. 103(4), pages 1138-1171, June.
    20. Aggarwal, Shilpa & Francis, Eilin & Robinson, Jonathan, 2018. "Grain today, gain tomorrow: Evidence from a storage experiment with savings clubs in Kenya," Journal of Development Economics, Elsevier, vol. 134(C), pages 1-15.
    21. Ambler, Kate & Herskowitz, Sylvan & Maredia, Mywish K., 2021. "Are we done yet? Response fatigue and rural livelihoods," Journal of Development Economics, Elsevier, vol. 153(C).
    22. Goldberg, Jessica, 2017. "The effect of social pressure on expenditures in Malawi," Journal of Economic Behavior & Organization, Elsevier, vol. 143(C), pages 173-185.
    23. Emma C. Stephens & Christopher B. Barrett, 2011. "Incomplete Credit Markets and Commodity Marketing Behaviour," Journal of Agricultural Economics, Wiley Blackwell, vol. 62(1), pages 1-24, February.
    24. Robert T. Jensen & Nolan H. Miller, 2008. "Giffen Behavior and Subsistence Consumption," American Economic Review, American Economic Association, vol. 98(4), pages 1553-1577, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Le Cotty, Tristan & Maître d’Hôtel, Elodie & Subervie, Julie, 2023. "Inventory credit to enhance food security in Burkina Faso," World Development, Elsevier, vol. 161(C).
    2. Tabitha Nindi & Jacob Ricker‐Gilbert & Jonathan Bauchet, 2024. "Incentive mechanisms to exploit intraseasonal price arbitrage opportunities for smallholder farmers: Experimental evidence from Malawi," American Journal of Agricultural Economics, John Wiley & Sons, vol. 106(1), pages 330-353, January.
    3. Albuquerque, Rui & de Araujo, Bruno & Brandao-Marques, Luis & Mosse, Gerivasia & de Vletter, Pippy & Zavale, Helder, 2024. "Market timing, farmer expectations, and liquidity constraints," Journal of Development Economics, Elsevier, vol. 168(C).
    4. Premand, Patrick & Stoeffler, Quentin, 2022. "Cash transfers, climatic shocks and resilience in the Sahel," Journal of Environmental Economics and Management, Elsevier, vol. 116(C).
    5. Channa, Hira & Ricker-Gilbert, Jacob & Feleke, Shiferaw & Abdoulaye, Tahirou, 2022. "Overcoming smallholder farmers’ post-harvest constraints through harvest loans and storage technology: Insights from a randomized controlled trial in Tanzania," Journal of Development Economics, Elsevier, vol. 157(C).
    6. repec:ags:aaea22:335716 is not listed on IDEAS
    7. Premand, Patrick & Stoeffler, Quentin, 2022. "Cash transfers, climatic shocks and resilience in the Sahel," Journal of Environmental Economics and Management, Elsevier, vol. 116(C).
    8. Wouter Zant, 2022. "Two Birds with One Stone: Technology Adoption and Market Participation through Protection against Crop Failure," Tinbergen Institute Discussion Papers 22-091/V, Tinbergen Institute.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gross, Jeremie & Guirkinger, Catherine & Platteau, Jean-Philippe, 2020. "Buy as you need: Nutrition and food storage imperfections," Journal of Development Economics, Elsevier, vol. 144(C).
    2. Ubfal, Diego, 2016. "How general are time preferences? Eliciting good-specific discount rates," Journal of Development Economics, Elsevier, vol. 118(C), pages 150-170.
    3. T Le Cotty & E Maître d’Hôtel & R Soubeyran & J Subervie, 2019. "Inventory Credit as a Commitment Device to Save Grain Until the Hunger Season," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 101(4), pages 1115-1139.
    4. Wouter Zant, 2022. "Two Birds with One Stone: Technology Adoption and Market Participation through Protection against Crop Failure," Tinbergen Institute Discussion Papers 22-091/V, Tinbergen Institute.
    5. Lori Beaman & Dean Karlan & Bram Thuysbaert & Christopher Udry, 2023. "Selection Into Credit Markets: Evidence From Agriculture in Mali," Econometrica, Econometric Society, vol. 91(5), pages 1595-1627, September.
    6. Marshall Burke & Lauren Falcao Bergquist & Edward Miguel, 2019. "Sell Low and Buy High: Arbitrage and Local Price Effects in Kenyan Markets," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 134(2), pages 785-842.
    7. Steinert, Janina Isabel & Vasumati Satish, Rucha & Stips, Felix & Vollmer, Sebastian, 2022. "Commitment or concealment? Impacts and use of a portable saving device: Evidence from a field experiment in urban India," Journal of Economic Behavior & Organization, Elsevier, vol. 193(C), pages 367-398.
    8. Albuquerque, Rui & de Araujo, Bruno & Brandao-Marques, Luis & Mosse, Gerivasia & de Vletter, Pippy & Zavale, Helder, 2024. "Market timing, farmer expectations, and liquidity constraints," Journal of Development Economics, Elsevier, vol. 168(C).
    9. Singh, Nirvikar, 2018. "Financial Inclusion: Concepts, Issues and Policies for India," MPRA Paper 91047, University Library of Munich, Germany.
    10. Mayra Buvinic & Megan O’Donnell, 2017. "Gender Matters in Economic Empowerment Interventions: A Research Review," Working Papers id:11926, eSocialSciences.
    11. Aggarwal, Shilpa & Francis, Eilin & Robinson, Jonathan, 2018. "Grain today, gain tomorrow: Evidence from a storage experiment with savings clubs in Kenya," Journal of Development Economics, Elsevier, vol. 134(C), pages 1-15.
    12. Mohamed Abouaziza, 2022. "Farmer constraints and relational contracts: evidence from agricultural value chains in East Africa," Economics PhD Theses 0122, Department of Economics, University of Sussex Business School.
    13. Batista, Catia & Vicente, Pedro C., 2020. "Improving access to savings through mobile money: Experimental evidence from African smallholder farmers," World Development, Elsevier, vol. 129(C).
    14. Wouter Zant, 2023. "How costly is using livestock as a savings device?," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 15(1), pages 77-110, February.
    15. Channa, Hira & Ricker-Gilbert, Jacob & Feleke, Shiferaw & Abdoulaye, Tahirou, 2022. "Overcoming smallholder farmers’ post-harvest constraints through harvest loans and storage technology: Insights from a randomized controlled trial in Tanzania," Journal of Development Economics, Elsevier, vol. 157(C).
    16. Daniel Agness & Travis Baseler & Sylvain Chassang & Pascaline Dupas & Erik Snowberg, 2022. "Valuing the Time of the Self-Employed," CESifo Working Paper Series 9567, CESifo.
    17. Wonhyung Lee & Nurul Widyaningrum, 2019. "Multidimensional access to financial services: Insights from Indonesia," Progress in Development Studies, , vol. 19(1), pages 21-35, January.
    18. Simone Schaner, 2018. "The Persistent Power of Behavioral Change: Long-Run Impacts of Temporary Savings Subsidies for the Poor," American Economic Journal: Applied Economics, American Economic Association, vol. 10(3), pages 67-100, July.
    19. Brune, Lasse & Giné, Xavier & Goldberg, Jessica & Yang, Dean, 2017. "Savings defaults and payment delays for cash transfers: Field experimental evidence from Malawi," Journal of Development Economics, Elsevier, vol. 129(C), pages 1-13.
    20. Hill, Ruth Vargas & Kumar, Neha & Magnan, Nicholas & Makhija, Simrin & de Nicola, Francesca & Spielman, David J. & Ward, Patrick S., 2019. "Ex ante and ex post effects of hybrid index insurance in Bangladesh," Journal of Development Economics, Elsevier, vol. 136(C), pages 1-17.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:deveco:v:160:y:2023:i:c:s0304387822001031. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/devec .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.