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

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  • Okoye, B.C
  • Onyenweaku, C.E
  • Ukoha, O.O

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.

Suggested Citation

  • Okoye, B.C & Onyenweaku, C.E & Ukoha, O.O, 2010. "An Ordered Probit Model Analysis of Transaction Costs and Market Participation by Small-Holder Cassava Farmers in South-Eastern Nigeria," MPRA Paper 26114, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:26114
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    References listed on IDEAS

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    1. Vakis, Renos & Sadoulet, Elisabeth & de Janvry, Alain, 2003. "Measuring Transactions Costs from Observed Behavior: Market Choice in Peru," CUDARE Working Papers 25110, University of California, Berkeley, Department of Agricultural and Resource Economics.
    2. Jill E. Hobbs, 1997. "Measuring the Importance of Transaction Costs in Cattle Marketing," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(4), pages 1083-1095.
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    Cited by:

    1. Ahamefule, B.A. & Uzochukwu, C.O. & Offor, E.I., 2018. "Analysis of Credit demand by Smallholder Farmers in Bende Local Government Area of Abia State," Nigerian Agricultural Policy Research Journal (NAPReJ), Agricultural Policy Research Network (APRNet), vol. 5(1), September.
    2. Ohajianya, D.O. & Ugochukwu, Albert I., 2011. "An Ordered Probit Model Analysis of Transaction costs and Market Participation by Sweet Potato Farmers in South Eastern Nigeria," 85th Annual Conference, April 18-20, 2011, Warwick University, Coventry, UK 108936, Agricultural Economics Society.

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    More about this item

    Keywords

    Ordered Probit; Transaction Costs; Market Participation and Cassava;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D2 - Microeconomics - - Production and Organizations

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