Conceptualising the Effects of Seasonal Financial Market Failures and Credit Rationing in Applied Rural Household Models

A wide variety of farm household models have provided a valuable theoretical basis for empirical and conceptual analysis of interactions between production and consumption resource allocations of poor rural people. A weakness of common applications of many such models, and unfortunately of much analysis, is failure to routinely also recognise and adequately describe the fundamental seasonal nature of most agricultural production and the effects of pervasive seasonal finance market failures on poor rural people’s behaviour and welfare. This is despite considerable theoretical work demonstrating the importance of seasonal financial market failures as constraints on agricultural development. A general model recognising this is presented, with graphical applications showing the potential importance of seasonal finance constraints on farm households’ behaviour and welfare. Formal methods for allowing for the effects of seasonal finance constraints on household responses to policy and other change should be standard tools used by applied rural development economists.


Issue Date:
2012-05
Publication Type:
Journal Article
DOI and Other Identifiers:
ISSN 0049-8599 (Other)
PURL Identifier:
http://purl.umn.edu/155474
Published in:
Volume 51, Number 2
Quarterly Journal of International Agriculture
Page range:
113-133
Total Pages:
21
JEL Codes:
Q12
Series Statement:
Quarterly Journal of International Agriculture 51 (2012)
2




 Record created 2017-04-01, last modified 2017-05-19

Fulltext:
Download fulltext
PDF

Rate this document:

Rate this document:
1
2
3
 
(Not yet reviewed)