Year: 2006
Type: article
Abstract: Do rural households in developing countries make market participation and volume decisions simultaneously or sequentially? This article develops a two‐stage econometric method to test between these two competing hypotheses regarding household‐level marketing behavior. The first stage models the household's choice of whether to be a net buyer, autarkic, or a net seller in the market. The second stage models the quantity bought (sold) for net buyers (sellers) based on observable household characteristics. Using household data from Kenyan and Ethiopian livestock markets, we find evidence in favor of sequential decision making, the welfare implications of which we discuss.
Authors: Marc F. Bellemare, Christopher B. Barrett
Institution: Cornell University
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
SDG: No poverty
Open Access status: bronze
Awards: G300141313, G5344355872, G706830023
OpenAlex ID: W2171195484