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Wait and Sell: Farmer Preferences and Grain Storage in Burkina Faso

Author

Listed:
  • Tristan Le Cotty
  • Elodie Maître d’Hôtel
  • Raphaël Soubeyran
  • Julie Subervie

Abstract

Using original data collected from 1,500 farmers in Burkina Faso in 2013, we show that individual risk and time preferences play a central role in grain storage decisions. We use a sample selection model as well as a structural estimation approach. Both of them lead to results that are very similar in size. We find that a one-standard-deviation increase in the discount rate (resp. risk aversion coefficient) results in a large decrease (resp. increase) on storage of about 45% (resp. 25%). Our data moreover suggest that farmers have hyperbolic time preferences, but we do not find evidence that this feature significantly affects storage decisions. We then use the theoretical model to simulate a public policy aiming to smooth inter-seasonal grain price variability. We show that half of farmers in our sample would benefit from such a policy.

Suggested Citation

  • Tristan Le Cotty & Elodie Maître d’Hôtel & Raphaël Soubeyran & Julie Subervie, 2014. "Wait and Sell: Farmer Preferences and Grain Storage in Burkina Faso," Working Papers 14-07, LAMETA, Universtiy of Montpellier, revised May 2015.
    • Handle: RePEc:lam:wpaper:14-07
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    References listed on IDEAS

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