Effect of Transaction Costs on Seller Decisions among Small-Holder Cassava Farmers in South-Eastern Nigeria

B.c Okoye, C.e Onyenweaku and O.o Ukoha
Authors registered in the RePEc Author Service: Okoye, B.C

MPRA Paper from University Library of Munich, Germany

Abstract: A linear probability model (LPM) analysis of seller decisions selling cassava on-farm (farm-gate) or off-farm (market) was derived and estimated consistent with a sample 216 farm households. Variables of proportional transaction costs have different effects on off-farm and on-farm market participation decisions. The seller type decision revealed that coefficients for have a personal means of transport, road conditions to the nearest town and marketing experience were positive and significantly related to increase in off-farm cassava sellers at 5% level of probability. The coefficient for distance from the house to the farm was negatively and significantly related to increase in farmers selling off-farm at 1% level of probability. The coefficients for crop transportation costs, distance to the nearest town, distance from the house to the farm and yield were negative and significant at 5% level of probability. These decisions to participate as an off-farm or on-farm seller were as a result of proportional transaction costs associated with participating in the market. It was found that unexpected transaction costs inhibit farm households from selling off-farm. The results therefore calls for policies aimed at infrastructural development especially on roads and establishment of bulking centers to mitigate transportation costs.

Keywords: Transaction Costs; Seller Decisions and Cassava Farmers (search for similar items in EconPapers)
JEL-codes: D2 D21 D23 (search for similar items in EconPapers)
Date: 2010-08-10
New Economics Papers: this item is included in nep-afr and nep-agr
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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