Heterogeneous Preferences for Selecting Attributes of Farmland Management Right Mortgages in Western China: A Demand Perspective

Yanling Peng, Yuansheng Jiang and Yu Hong
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Yanling Peng: College of Economics, Sichuan Agricultural University, Chengdu 611130, China
Yuansheng Jiang: College of Economics, Sichuan Agricultural University, Chengdu 611130, China
Yu Hong: Institute of Agricultural Economics and Development, Chinese Academy of Agricultural Sciences, Beijing 100081, China

Land, 2022, vol. 11, issue 8, 1-14

Abstract: Farmland management right mortgages (FMRMs) are emerging land financing products in China. However, the development of FMRMs and farmers’ demands for them are poorly understood. This study applied an in-the-field choice experiment of 1815 farmers, conducted in China, to examine farmers’ demands for FMRMs and explore their heterogeneous preferences regarding the attributes of FMRMs. Results from the random parameters logit model suggest that farmers are interest-rate sensitive and willing to pay for FMRM products that use farmland management rights as the sole collateral, enabling amortization, and without insurance and guarantee requirements. Results from the latent class model further suggest that guarantee takers strongly prefer lump-sum repayments and are more inclined to select insurance and guarantees relative to their counterparts, while guarantee averters strongly prefer to pay off loans with amortization and have positive propensities to purchase insurance. Moreover, female farmers with high education levels, entity identities, and loan experiences are more willing to pay off their loans at once and purchase insurance. Our findings provide insight into the roles of financial product attributes and borrowers’ characteristics in their demand for FMRMs. It may facilitate the design of optimal portfolios and adoption incentives for land mortgage products.

Keywords: farmland management right mortgages; discrete choice experiment; willingness-to-pay (search for similar items in EconPapers)
JEL-codes: Q15 Q2 Q24 Q28 Q5 R14 R52 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jlands:v:11:y:2022:i:8:p:1157-:d:872269

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