Market Participation Decisions Research Articles

Determinants of commercialization among onion producer households in southern Ethiopia: a double hurdle approach

This study examined the determinants of onion commercialization of smallholder farmers in the Wolayita and Gomo zones of southern Ethiopia. Both primary and secondary data were used in this study. Primary data were collected from randomly selected 160 onion producers by using a structured questionnaire. Both descriptive statistics and the double-hurdle econometric model were employed in the analysis. The descriptive statistics indicated that the mean commercialization level of smallholder farmers in the study area was 79.51%, highlighting that onion producers in this region primarily focus on marketing their produce. Using the econometric model the first-stage double hurdle results revealed that family size, farming experience, frequency of extension contacts, and distance to the nearest market were factors significantly affecting the market participation decision of onion producers. The second stage of the double hurdle results indicates that education level, family size, frequency of extension contacts, land size allotted for onion production, and distance to the nearest market were factors that significantly affected the level of onion commercialization. Therefore, policies aimed at increasing farmers' access to better road networks and transportation facilities, improving access to education, promoting agricultural training programs, and improving extension services are recommended to improve the commercialization of onion production.

Gender differentials in primary processing and market participation by mopane worm harvesters in Zimbabwe: insights from the COVID-19 pandemic phase

BackgroundGender disparities in access to inputs, markets, financial inclusion, and participation in strategic value chains are major developmental challenges in emerging economies. Participation in the edible insect value chain has become an essential source of income, food, and nutrition in some African countries. This paper uses a bivariate probit model to examine the gender differentials for primary mopane worm harvesters’ participation in primary processing and market participation during COVID-19 in Southeastern Zimbabwe. Using a structured questionnaire, the data were gathered from 393 primary harvesters in five purposively selected wards in the Gwanda District of Zimbabwe. This study examines the gender differentials for primary mopane worm harvesters’ participation in primary processing and market participation during COVID-19 in Southeastern Zimbabwe.ResultsResults show that women are likelier to participate in primary value addition to preparing for the lean season opportunities. There are gender differentials in the participation in markets during COVID-19. Results show a significant negative relationship between participants' ages and female engagement in mopane processing and a positive correlation with female involvement in lean COVID-19 season marketing. Male harvesters’ participation in the lean market during the COVID-19 pandemic was significantly correlated positively with age and education level, while the choice to participate in the lean market was negatively correlated with the dependency ratio.ConclusionsCollaborative, community-centric, and gender-accommodative development of the mopane worm value chain is important. Focal issues are on supporting primary value addition for lean season market participation and during market shocks such as COVID-19. This can be a leap towards gender equality and improving livelihoods of women and men in mopane harvesting areas. The study recommends marketing and district-specific policies explicitly addressing mopane worm harvesting and marketing affects market participation and primary value-addition decisions.

Can digital technology promote market participation among smallholder farmers?

Abstract Digital technology holds significant potential for enhancing business efficiency in agricultural marketing. However, empirical research on the use of digital technology among smallholder farmers engaged in staple crop marketing in Sub-Saharan Africa remains limited. Recognizing the pivotal role of digital technology in agriculture, this study aims to analyse and synthesize existing knowledge regarding the impact of mobile phones on market participation among smallholder farmers. Through a comprehensive analysis, we seek to provide a robust understanding that can inform policies and programs aimed at enhancing smallholder market integration. To achieve this objective, we collected cross-sectional data from 360 farmers in southeast Nigeria and implemented a double hurdle model to analyse market participation decisions and the extent of farmers’ involvement in staple crop markets. In addition to traditional econometric methods, we employed propensity score matching to further investigate the impact of mobile phone ownership on market participation. Our analysis revealed that ICT tools, particularly mobile phones and radios, significantly influence both the decision and intensity of market participation among smallholder farmers. Specifically, mobile phones were found to play a crucial role in facilitating access to market pricing information and disseminating knowledge on improved production methods. Given the volatility of farm prices, the timely dissemination of market information through mobile phones is essential for farmers to make informed decisions. With a high percentage of mobile phone ownership and substantial investments in mobile networks in Nigeria, the digitalization of extension services and marketing information delivery systems could catalyse rapid improvements in agribusiness and marketing. This shift towards digital platforms has the potential to address information asymmetry, particularly among smallholder farmers, thereby fostering greater market integration and economic empowerment within rural communities.

Tests for market failures and overcoming transaction costs barriers to market participation in Afghanistan

AbstractSimilar to other fragile poor countries, the majority of the rural population in Afghanistan depend directly or indirectly on small-scale farming for their livelihoods, and poor infrastructure and other barriers restrict access to markets and services, making improving access to local input markets a significant challenge for policymakers aiming to increase productivity. This paper offers empirical evidence addressing two important issues for smallholder participation in input markets: are rural markets incomplete or failing and how do transaction costs affect participation in factor markets? Pooled cross-sectional data from three waves of nationally representative surveys between 2011 and 2016 with a sample of nearly 21,000 households are used. The analysis first tests and rejects the separability hypothesis that household production and consumption decisions are independent which can be interpreted as evidence of market failures. A control function approach with instrumental variables to address endogeneity is employed to estimate household input market participation decisions. Ownership of or access to information and communication technology and transport equipment are used as proxies for transaction costs. Results confirm that lower transaction costs increase input market participation and expenditure on inputs by farm households. Additionally, households with better access to roads and district or provincial market centres have higher market participation and expenditure on input. Reducing transaction costs plays an important role in input use, potentially increasing productivity and incomes.

Determinants of urban agriculture market participation decision and intensity in eastern Ethiopia

Small-scale urban farmers' active involvement in the urban agriculture (UA) output market is one strategy to ease an urban food shortage while sustaining their livelihoods and income. Enhancing market participation and intensity requires identifying the factors that affect UA market participation. Thus, the study aimed to determine the factors influencing UA market participation decisions and intensity in Eastern Ethiopia. Using a semi-structured questionnaire, the study utilized primary data collected from 270 randomly selected urban farmers. The Double Hurdle (DH) Model was used to determine the factors influencing urban farmers' participation and intensity in the UA output market. According to the first stage DH Model results, age, education, occupation, family size, farming experience, UA-related training, dependency ratio, and market information, all had a significant impact on the decision to participate in the UA output market. The second stage DH Model of Truncated regression indicated that the intensity of UA output market participation decision was significantly affected by the education, land size, UA-related training, and market information are all important factors determine the intensity of UA output market participation. Improving the ability to use the land for UA purposes, awareness creation through short-term training, and improving information access are important recommendations to enhance UA output market participation and intensity of participation.

Determinants of market participation for small scale broiler farmers in Leribe District of Lesotho

The poultry industry is the fasted growing sub-sector of agriculture in the developing world and this is attributed to several pulling and pushing factors. On the demand side, the issue of urbanisation, income increase and animal protein requirements particularly for chicken has a positive influence on the growth of poultry production. Poultry farming is highly practised in rural households in Lesotho, and it constitutes an important contribution to the development of the rural economy in most developing countries. The poultry industry remains an important sub-sector of agriculture like in many other developing countries and it remains the main source of livelihood for village people and other small-scale farmers in the economy. Many rural communities are keeping poultry as a source of meat and eggs to feed their families, raise income from the surplus and create employment opportunities. However, access to formals markets remains a critical challenge for the farmers. This study examined the socio-economic, market and institutional factors that influenced broiler farmers’ market participation and intensity of participation in the Leribe district in Lesotho. A two-stage sampling technique was employed to select 114 respondents from five villages and the survey data was collected through a structured questionnaire. Heckman's two-stage model was used to analyse factors influencing farmers' market participation and the intensity of market participation. Gender, farmer income, storage access, production experience, extension service, credit access and information access were significant and influenced farmers’ market participation decisions. The study recommends interventions that will increase access and formal market participation.

Determinants of Market Participation of Artisanal Gold Miners: Evidence from Kumuruk District, Northwest Ethiopia

In Ethiopia as well as most other regions of the world, the artisanal mining industry was mostly ignored, because of there are a number of factors limiting the performance of Ethiopia's artisanal mining market participation. So the purpose of this study was to determine the extent of market participation of artisanal gold miners in the Kumuruk District, Northwest Ethiopia. The respondents were chosen using a two stage sampling procedure in order to accomplish this. The initial phase involves the deliberate selection of Seven Assosa District gives rise to Kumuruk District. Five kebeles were chosen at random from the sixteen kebeles in the second stage. From the provided sampling frame, 200 respondents were chosen using a systematic random sampling technique. Tools used to analyze the data included Stata14 version and SPSS version 21 statistical software. The results of descriptive statics show that gold producers and brokers were found to be important gold market mediators at mining gate and that eight market catchments were present in the study area. Additionally, the Heckman two stage econometric estimation procedure was used to identify factors that limit gold market participation decision and gold sale weight of the artisan gold miners’ households in the study area. Informational resources, age, proximity to the market, prior mining experience, years of schooling, and household size all have a favorable and significant impact on gold market involvement. The amount of gold that each responder provided served as the depend ant changeable. Age, years of schooling, ownership of mining equipment, availability of non-mining income, cost of transportation, and informational resources were all significantly and favorably correlated with the amount of gold supplied for sales. This implies that a rise in any of these factors will result in a rise in the amount of gold offered for sale. According to the survey, efforts should be taken to open more places of sale. In order to increase market participation, mining areas should establish a direct market channel with the National Bank of Ethiopia. Additionally, youth participation in mining operations should be encouraged in order to minimize transportation expenses. Encourage the government to set up a revolving and collateral fund, and encourage microfinance institutions to open branches close to artisanal miners.

Informal land markets and ethnic kinship in West African cities

We present an urban land use model with land tenure insecurity and information asymmetry regarding risks of contested land ownership, a very common issue in West African cities. A market failure emerges as sellers do not internalize the impact of their market participation decision on the average quality of traded plots, which in turn affects other sellers and buyers’ decisions. The equilibrium is suboptimal and has too many transactions of insecure plots and too few transactions of secure plots. This market failure can be addressed when agents trade along trusted kinship lines that discourage undisclosed sales of insecure plots. Such kinship matching is an important feature of West African societies, including on the market for informal land, as illustrated by a unique survey administered in Bamako, Mali. In the model, the extent to which the market failure is addressed increases with the intensity of kinship ties. When sellers also have the possibility of registering their property right in a cadastre, this not only further attenuates information asymmetry but also helps reduce risk. We find complementarity between kinship matching and registration: As transactions along trusted kinship lines tend to involve plots that are more secure on average, kinship matching makes registration better targeted at insecure plots traded outside kinship ties. In this context, a partial registration fee subsidy can bring the economy to the social optimum.11We are grateful to the editor and two anonymous referees for comments that helped us substantively improve the paper as well as to Amadou Cissé for the many discussions about social structures in West Africa that initially motivated this paper, to Demba Karagnara who coordinated field surveys in Bamako in 2012 and 2022, and to Pierre M. Picard, Jan Brueckner and Tony Yezer for suggestions and technical comments on the model. We are also grateful to Eliana la Ferrara and Karen Macours for useful insights on kinship and land markets in developing countries, as well as to Thierry Verdier, Miren Lafourcade and the participants to the Labor and Public Economics Seminar at the Paris School of Economics, to the International Conference of Development Economics and to the Annual Conference of the Centre for the Study of African Economies for various suggestions. We gratefully acknowledge the funding of the World Bank and of the Paris School of Economics Mobility Grant, a public grant overseen by the French National Research Agency (ANR-18-CE22-0013-01), the Labex OSE and the Labor and Public Economics Group at the Paris School of Economics .

DSO Market for Transactive Scheduling of Electric Vehicle Charging Stations in Constrained Hierarchical Power Distribution and Urban Transportation Networks

The trend toward the deployment of electric vehicle charging stations (EVCSs) equipped with on-site distributed energy resources indicates potential transactive energy market (TEM) operations among EVCSs. However, unlike regular prosumers, EVCS operations are influenced by both the power distribution network (PDN) and the urban transportation network. In this paper, we propose a three-stage approach for solving the hierarchical energy scheduling and trading problem of EVCSs. At the first stage, the day-ahead traffic assignment problem of the transportation system is solved to determine individual EVCSs’ charging load. At the second stage, EVCSs solve their profit maximization problem to determine their energy scheduling and market participation decisions. Lastly, at the third stage, TEM among EVCSs is cleared by the distribution system operator (DSO). With the DSO shouldering both grid operator and market operator functions, the DSO problem is formulated as an unbalanced three-phase optimal power flow (OPF) model integrating a double-sided auction mechanism. To further improve the PDN operation, grid features such as network reconfiguration and tap changers are introduced into the OPF model. The effectiveness of the proposed framework is proved through case studies.

Households’ Decision on Capital Market Participation: What Are the Drivers? A Multi-Factor Contribution to the Participation Puzzle

Stock market investments are in the spotlight of the household finance literature, although real-world households make other financial decisions of higher relevance. We widen the scope and include decisions related to, e.g., voluntary pension plans, whole life insurance contracts, and housing and investments in other risky assets than stocks, e.g., bonds or mutual funds. Further, we provide a methodology that goes beyond regression analysis by employing a structural equation analysis (SEA) and apply it on data from a broad and representative survey of the German Central Bank. Our SEA allows us to investigate and quantitatively estimate complex relationships and to test several hypotheses simultaneously. Our structural equation model captures about 60% of the variation in the capital market participation decision. The results show that although households' financial literacy and risk aversion are most strongly related to investments in risky assets, further factors such as wealth, voluntary pension plans and whole life insurance contracts, financial advice, and investment experience should also be considered. Financial literacy is negatively related to risk aversion, i.e., the higher the financial literacy, the lower is the risk aversion. Age and gender are directly related to capital market participation and indirectly via financial literacy and risk attitude.

Impact of financial literacy on financial inclusion and household financial decisions: exploring the role of ICTs

The objective of this paper is to assess the extent of financial literacy and the impact of access to and use of ICTs (information and communication technologies) on household financial decisions, such as savings, retirement planning, household budgeting, and engagement in financial markets. This study analyzes survey data collected from 409 households belonging to the low- and middle-income brackets across four cities in Pakistan. By employing probit model, it finds that a higher level of (advanced) financial literacy is associated with an increased likelihood of improved savings and household budgeting. However, the overall financial literacy score (basic plus advanced) is associated only with savings decision. Additionally, the results reveal that the ICTs adoption plays a role in influencing decisions related to financial market participation and savings. The results also show that financial literacy, along with ICTs, positively influences financial market participation and retirement decisions. Nevertheless, results suggest mixed impacts of financial literacy and ICTs on financial decisions which lends partial support to the study hypotheses. In conclusion, our results underscore the importance of financial literacy alongside ICT adoption to promote financial market participation and improve household financial management.

The labour market dilemma of young urban women in India: An outcome of family welfare optimization

This paper uses a theoretical model to explain the patterns and determinants of labour market participation behaviour of young urban women in India. Based on the National Sample Survey (NSS) data and through probit regression results, it argues that the labour market participation decision of young women is an outcome of the joint utility maximization behaviour of their family. The standard of living of the family, market wage, other family characteristics, including the number of children, adult women in the family, elderly members, and occupation, and gender of the head, etc., are significantly determining their labour market participation; apart from women’s individual characteristics like age (experience) and level of education and training. The empirical result also reflects that the “discouraged worker effect” is stronger than the “added worker phenomenon”. Hence, measures to create jobs in modern services could help boost the stagnant female labour force participation in urban India.

I share because I care! Smallholder farmers’ perceptions of the usefulness of word of mouth for their market participation decisions

PurposeThe approach to integrate concepts from different disciplines so as to solve the problems facing smallholder farmers has gained momentum in recent years. However, very little is known about how word-of-mouth (WOM) dimensions can be used in agricultural marketing to explain market participation among smallholder farmers. Therefore, this study investigates the perceived usefulness of WOM in explaining smallholder farmers’ market participation.Design/methodology/approachThe cross-sectional design was carried out to survey a sample of 467 smallholder farmers. This study used partial least squares structural equation modelling (PLS-SEM) in SmartPLS 4 to test hypotheses.FindingsThe results revealed that WOM dimensions such as expertise differential, strong tie and trustworthiness among smallholder farmers significantly influence the WOM message delivery. Likewise, the findings suggest that WOM message delivery significantly influences market participation among smallholder farmers. Finally, it was revealed that WOM message delivery significantly mediates the relationship between WOM dimensions and market participation.Practical implicationsThis study provides useful insights to smallholder farmers on how to use WOM dimensions to enhance more market participation in formal markets, especially through proper WOM message delivery.Originality/valueThe current study solves the problem of information asymmetry among smallholder farmers through WOM. It is perhaps the first study to establish the link between WOM dimensions and market participation among smallholder farmers in the context of developing countries.

Social support and household stock market participation

This study investigates the relationship between social support and stock market participation using data from the China Household Finance Survey (CHFS). Both intangible and tangible dimensions of social support are explored to examine their impact on stock market participation decisions. The empirical findings demonstrate that both support dimensions (i.e., intangible and tangible) would positively influence stock market participation, and intangible support has a greater impact as compared to tangible support. Moreover, this paper offers physical health and mental happiness to explain the mechanisms of social support.

The Effect of Supply Chain Factors on Market Participation Among Smallholder Cereal Crop Producers in Tanzania

Studies that address the effect of supply chain (SC) factors on market participation are relatively inadequate. To bridge this gap, we employ marginal effects analysis based on the binary logit model to examine the effect of SC factors on market participation among smallholder cereal crop producers in Tanzania. Data were sourced from 359 smallholder cereal crop producers using a cross-sectional questionnaire survey. The findings of the study indicate that SC infrastructure negatively and significantly affects smallholders’ market participation decisions ( β = −0.0918, p < .0013). Furthermore, the results of marginal effects suggest that market participation by smallholder cereal crop producers is positively and significantly affected by the extent of competition between agricultural SCs ( β = 0.1729, p < .0001), SC distribution strategies ( β = 0.2911, p < .0015) and collaborative SC ( β = 0.1856, p < .0002). These findings provide sufficient evidence to conclude that SC factors are significant predictors of market participation among the surveyed smallholder cereal crop producers. Consequently, streamlined measures should be undertaken to help smallholders increase their odds of market participation. These measures may include upgrading road infrastructure to tarmac or bitumen standards, especially in rural areas where farming takes place, infusing farmers’ associations and agricultural extension services, promoting collective marketing and strengthening long-term relationships between farmers and traders. Finally, the study offers valuable information to policymakers and agricultural stakeholders regarding addressing smallholders’ market participation challenges from a SC perspective.

Production technology adoption and electronic market participation intensity of chilli (dry) farmers in India: Application of triple-hurdle model

Agricultural and food system transformation helps increase farm productivity and encourages farmers to participate in updated value chains, adopt newer technologies, thereby helping farmers transform their livelihoods in a sustainable manner. Relatedly, value chain innovations depend on multiple decisions farmers make at various stages of the value chain, adequate participation being a primary factor. In this paper, we integrate farmers’ adoption decision of a new variety of chilli crop (“Teja”) along with their electronic market participation decision and e-market participation intensity, based on data from the chilli farming sector in India, where agricultural markets have been modernized through digitization (Kalgudi e-Market). Thus, the employed Triple-Hurdle Model (THM) integrates adoption decision of “Teja” variety of chilli, e-Market Participation Decision and e-market participation intensity thereby, allowing us to make inferences relating to chilli farmers in Andhra Pradesh, India. Our results, showed that the drivers of “Teja” variety adoption, e-market participation, and e-participation intensity include education, reliable extension services, access to seeds of high yielding varieties, market information, and membership in farmer-producer organizations. Added to these, personnel training visits, prompt deliveries of inputs, and prompt payment of sales proceeds are also important in influencing participation and intensities. Results show that the three stochastic decisions of THM are strongly correlated implying that the adoption decision of “Teja” variety of chilli by the farmers influences the e-market participation decision and consequently, e-market participation intensity and these three decisions are sequential. On the contrary, the decisions viz., e-market participation decision and e-market participation intensity as input buyers and consequent adoption of “Teja” variety of chilli are simultaneous. So, the policy measures that promote production technology interventions (say, “Teja” variety of chilli) will definitely enhance better e-market access of chilli farmers. Accordingly, the breeding programs of the agricultural research stations should enhance the uptake of improved varieties in tune with modern marketing (e-market) technologies. Future farm policy and agricultural-research and innovations must recognize the potential that the digital marketing systems have to offer. Such considerations coupled with the provision of market infrastructure including assaying, grading, storage, and market information will promote digital transformation in agricultural value chains in developing countries like India.

Market participation of smallholder groundnut farmers in Northern Ghana: Generalised double-hurdle model approach

Market participation is both a cause and a consequence of economic development. Markets offer households the opportunity to specialize according to comparative advantage and thereby enjoy welfare gains from trade. The current literature on product marketing in Ghana is inadequate for designing and implementing effective policies to overcome problems in the marketing system, especially leguminous crops. Based on this, the study analyses the determinants of groundnut farmers’ decision to participate and the level of market participation in Northern Ghana using cross-sectional data from 250 smallholder farmers. We employed the generalized double hurdle model to analyse the objectives of this study. On average, the study found that 62% of groundnut output harvested by farm households in Northern Ghana was sold on the market. The most significant determinants of market participation decision and intensity of participation in the groundnut market include extension service, distance to output market, farmer-based organization, off-farm income, output price, use of improved groundnut variety, and access to transport. We recommend that strategies and policies aiming at promoting smallholder commercialization should focus on providing rural infrastructure, market-oriented extension services, and forming farmer groups for collective marketing.

Factors Affecting Market Participation Decision and Intensity of Participation of Cow Milk Producers in Gemechis District, Ethiopia

Cow milk is a daily produced high value product that plays a significant role for both home consumption and income generating. However, in the selling of raw milk marketed supply, the producers do not attain potential gains. Thus, this study attempted to identifying factors affecting farmers’ decision to participate and determinants of the level of cow milk marketable surplus supply in Gemechis district. Both primary and secondary sources were used to collect data. Data were collected from a sample of 152 cow milk producers were analyzed through STATA ver. 15. Double hurdle model was applied. The first-hurdle model estimation result demonstrated that education level, distance to district market, the proportion of land allocated for forage production, size of milk output per day, access to milk market information, and frequency of extension contact influences farmers’ decision to participate in cow milk market. The second-hurdle model results investigated that children under six years, the proportion of land allocated for forage production, size of milk output per day and access to credit were significantly affects the level of cow milk marketable surplus supply. Therefore, the study recommends that emphasis should have to give on encouraging flow of milk market information, intensification of land use, and enabling farmers as they produce more through improving production and productivity of cow. Keywords: Cow milk, Double hurdle, Gemechis district DOI: 10.7176/JMCR/89-02 Publication date: April 30 th 2023

Accounting Quality and Household Stock Market Participation

SYNOPSISRecent research documents that there is significant variation in stock market participation by state and suggests that there may be state-specific factors that determine stock market participation of U.S. households. Using household survey data, we examine how state-level, public-company accounting quality affects households’ stock market participation decisions. We find that households residing in states where local public companies have better accounting quality are more likely to invest in stocks. Also, those households invest greater amounts of their wealth in the stock market. Furthermore, we present some evidence that accounting quality affects stock market participation through local press coverage. Additional cross-sectional tests show that the effect of accounting quality on stock market participation is more pronounced among less affluent and less educated households, consistent with prior findings that familiarity with and trust in the stock market are more important for those types of households to make stock investments.JEL Classifications: D14; G11; M41.

Smallholder dairy producers’ participation in dairy marketing in Southern Omo Zone, Ethiopia

Dairy market development has been hampered by multi-faceted problems such as low adoption of improved technologies, absence of clear policy support for the sector, marketing problems, and other institutional factors. This study was aimed at analysing determinants of smallholder dairy producers’ participation decisions in dairy marketing and the intensity of participation in dairy marketing. It is also aimed at identifying the existing major constraints on dairy marketing in the study area. A total of 150 random sample households were chosen, and data were analysed using descriptive and econometric methods. A Heckman two-step selection model was used to analyse the determinants of dairy market participation decisions and levels of participation. The results indicated lower participation in dairy marketing (38.67%), despite the huge potential of livestock production in the area. Dairy producers’ market participation decisions were found to be significantly affected by the education status of the household head, access to market information, distance to the nearest market, number of lactating cows, and membership in a cooperative group, while the age of the household head, education status, land holding, and number of lactating cows significantly affected the dairy product sale volume. The findings imply that market information delivery systems, market infrastructures, and vocational education should be strengthened by the government and development partners.