IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/7368.html
   My bibliography  Save this paper

The Impact of Access to Credit on the Adoption of Tobacco in Malawi

Author

Listed:
  • Simtowe, Franklin

Abstract

This paper investigates the impact of access to credit on the adoption of burley tobacco among households that differ in their credit constraint status using a Double hurdle model. The data used in the study is from Malawi collected by the International Food Policy Research Institute (IFPRI) in collaboration with the Rural Development Department of Bunda College of Agriculture. Results reveal that while access to credit increases adoption among credit constrained households, it has a limited effect among unconstrained households. Results further show that access to credit does not lead to an immediate increase in the likelihood of adoption for tobacco, but conditional on adoption it enables credit constrained households to allocate more land to tobacco production. Consistent with theory, results for the test for separation of consumption and production decisions indicate that household demographic factors affect demand for labor among credit constrained households while they have no effect among unconstrained households.

Suggested Citation

  • Simtowe, Franklin, 2008. "The Impact of Access to Credit on the Adoption of Tobacco in Malawi," MPRA Paper 7368, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:7368
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/7368/1/MPRA_paper_7368.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Benjamin, Dwayne, 1992. "Household Composition, Labor Markets, and Labor Demand: Testing for Separation in Agricultural Household Models," Econometrica, Econometric Society, vol. 60(2), pages 287-322, March.
    2. Cragg, John G, 1971. "Some Statistical Models for Limited Dependent Variables with Application to the Demand for Durable Goods," Econometrica, Econometric Society, vol. 39(5), pages 829-844, September.
    3. Diagne, Aliou & Zeller, Manfred, 2001. "Access to credit and its impact on welfare in Malawi:," Research reports 116, International Food Policy Research Institute (IFPRI).
    4. Deaton, Angus & Irish, Margaret, 1984. "Statistical models for zero expenditures in household budgets," Journal of Public Economics, Elsevier, vol. 23(1-2), pages 59-80.
    5. Murray Smith, 2003. "On dependency in double-hurdle models," Statistical Papers, Springer, vol. 44(4), pages 581-595, October.
    Full references (including those not matched with items on IDEAS)

    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. David Aristei & Luca Pieroni, 2008. "A double-hurdle approach to modelling tobacco consumption in Italy," Applied Economics, Taylor & Francis Journals, vol. 40(19), pages 2463-2476.
    2. Richard Mussa, 2013. "Rural--urban differences in parental spending on children's primary education in Malawi," Development Southern Africa, Taylor & Francis Journals, vol. 30(6), pages 789-811, December.
    3. Nguyen, Huy, 2014. "The effect of land fragmentation on labor allocation and the economic diversity of farm households: The case of Vietnam," MPRA Paper 57521, University Library of Munich, Germany.
    4. Marcel Fafchamps & Agnes R. Quisumbing, 1999. "Human Capital, Productivity, and Labor Allocation in Rural Pakistan," Journal of Human Resources, University of Wisconsin Press, vol. 34(2), pages 369-406.
    5. Bekele A. Shiferaw & Tewodros A. Kebede & Liang You, 2008. "Technology adoption under seed access constraints and the economic impacts of improved pigeonpea varieties in Tanzania," Agricultural Economics, International Association of Agricultural Economists, vol. 39(3), pages 309-323, November.
    6. Maki, Atsushi & Nishiyama, Shigeru, 1996. "An analysis of under-reporting for micro-data sets: The misreporting or double-hurdle model," Economics Letters, Elsevier, vol. 52(3), pages 211-220, September.
    7. Hohfeld, Lena & Waibel, Hermann, 2013. "Investments of Rural Households in Northeast Thailand and the Future of Small Scale Farming," Quarterly Journal of International Agriculture, Humboldt-Universitaat zu Berlin, vol. 52(3), pages 1-20, August.
    8. R. Mussa, 2014. "Extending the Oaxaca-Blinder Decomposition to the Independent Double Hurdle Model: With Application to Parental Spending on Education in Malawi," Studies in Economics and Econometrics, Taylor & Francis Journals, vol. 38(3), pages 39-54, December.
    9. Yaldız Hanedar, Elmas & Broccardo, Eleonora & Bazzana, Flavio, 2014. "Collateral requirements of SMEs: The evidence from less-developed countries," Journal of Banking & Finance, Elsevier, vol. 38(C), pages 106-121.
    10. Mignouna, D.B. & Abdoulaye, T. & Alene, A. & Akinola, A.A. & Manyong, V.M., 2015. "Drivers of Market Participation Decisions among Small-scale Farmers in Yam Growing Areas of Nigeria and Ghana," 2015 Conference, August 9-14, 2015, Milan, Italy 230219, International Association of Agricultural Economists.
    11. Richard J. Vyn & Getu Hailu, 2015. "Discount Usage and Price Discrimination for Pork Products in Canada," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 63(4), pages 449-474, December.
    12. Mishra, Ashok K. & Williams, Robert P. & Detre, Joshua D., 2009. "Internet Access and Internet Purchasing Patterns of Farm Households," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 38(2), pages 1-18, October.
    13. Achoja Roland Onomu, 2024. "Determinants of Indigenous Floral Foods’ Commercialization among Rural Households: The Outcome of Double and Triple Hurdles in Amathole District Rural Community," Sustainability, MDPI, vol. 16(19), pages 1-25, September.
    14. Carlin, Paul S. & Flood, Lennart, 1997. "Do children affect the labor supply of Swedish men? Time diary vs. survey data," Labour Economics, Elsevier, vol. 4(2), pages 167-183, June.
    15. William H Greene & Mark N Harris & Preety Srivastava & Xueyan Zhao, 2013. "Econometric Modelling of Social Bads," Bankwest Curtin Economics Centre Working Paper series WP1305, Bankwest Curtin Economics Centre (BCEC), Curtin Business School.
    16. Kumar, Sunil Mitra, 2013. "Does Access to Formal Agricultural Credit Depend on Caste?," World Development, Elsevier, vol. 43(C), pages 315-328.
    17. Cei, Leonardo & Stefani, Gianluca & Defrancesco, Edi, 2021. "How do local factors shape the regional adoption of geographical indications in Europe? Evidences from France, Italy and Spain," Food Policy, Elsevier, vol. 105(C).
    18. C. Federico Perali & THOMAS L. COX, 1995. "Issues in Data Management of Expenditure Surveys: An Example from the Colombian 1984-85 Urban Survey," Wisconsin-Madison Agricultural and Applied Economics Staff Papers 389, Wisconsin-Madison Agricultural and Applied Economics Department.
    19. Aloyce R Kaliba & Kizito Mazvimavi & Theresia L Gregory & Frida M Mgonja & Mary Mgonja, 2018. "Factors affecting adoption of improved sorghum varieties in Tanzania under information and capital constraints," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 6(1), pages 1-21, December.
    20. C. Federico PERALI & Thomas L. COX, 1995. "Abstract Of Issues In Data Management Of Expenditure Surveys: An Example From The Colombian 1984-85 Urban Survey," Staff Papers 389, University of Wisconsin Madison, AAE.

    More about this item

    Keywords

    credit constraints; double-hurdle; tobacco; adoption; Malawi;
    All these keywords.

    JEL classification:

    • D0 - Microeconomics - - General
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    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:pra:mprapa:7368. 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: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    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.