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The Determinants of Polish Farmers' Credit Interest Rates: Hedonic Price Analysis and Implications for Government Policy

Martin Petrick () and Laure Latruffe ()

No 24757, 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark from European Association of Agricultural Economists

Abstract: Our micro-econometric analysis of agricultural credit market outcomes in Poland sheds new light on the relationship between contractual arrangements and interest rates. An innovative theoretical framework based on a hedonic market model is developed. We interpret the factors that influence interest rates as "quality" components of the credit contract. We use unique data including detailed information about Polish farmers' credit contracts. Both nominal interest rates and bank fees are considered. Results show that banks prefer liquid types of collateral, and care little about the loan's purpose. The effect of government subsidies on interest rates is small compared to the officially declared reduction of the nominal rate.

Keywords: Agricultural and Food Policy; Financial Economics (search for similar items in EconPapers)
Pages: 16
Date: 2005
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Persistent link: https://EconPapers.repec.org/RePEc:ags:eaae05:24757

DOI: 10.22004/ag.econ.24757

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