Inventory credit as a commitment device to save grain until the hunger season

Tristan Le Cotty, Elodie Maitre D'Hotel, Raphael Soubeyran and Julie Subervie
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Tristan Le Cotty: CIRED - centre international de recherche sur l'environnement et le développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique

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Abstract: In January 2013, we collected data from 653 farmers in Burkina Faso, whowere asked hypothetical questions about risk aversion and time discounting. Ten months later, these farmers were offered the opportunity to participate in an inventory credit system, also called warrantage, in which they receive a loan in exchange for storing a portion of their harvest as a physical guarantee in one of the newly-built warehouses of the program. We found that farmers who exhibit stronger hyperbolic preferences are significantly more likely to participate in the warrantage system than other, otherwise similar, farmers. We interpret this result as evidence that farmers use warrantage as a means to commit to saving a portion of their crop until the lean season, which may improve their capacity to ensure the food security of their household

Keywords: commitment savings; hyperbolic discounting.; inventory credit (search for similar items in EconPapers)
Date: 2019
Note: View the original document on HAL open archive server: https://hal.science/hal-02090939v1
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Citations: View citations in EconPapers (11)

Published in American Journal of Agricultural Economics, 2019, 101 (4), pp.1115-1139. ⟨10.1093/ajae/aaz009⟩

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Related works:
Journal Article: Inventory Credit as a Commitment Device to Save Grain Until the Hunger Season (2019)
Working Paper: Inventory credit as a commitment device to save grain until the hunger season (2018)
Working Paper: Inventory credit as a commitment device to save grain until the hunger season (2018)
Working Paper: Inventory credit as a commitment device to save grain until the hunger season (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02090939

DOI: 10.1093/ajae/aaz009

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