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Abstract
In this study, the Heckman procedure was used to analyze the way transaction costs affect
smallholder farming households’ participation in banana markets in the Great Lakes region of
central Africa. The results reaffirm that fixed transaction costs largely determine a farmer’s
decision to participate in the market, and that the extent of participation is affected mainly by
proportional transaction costs. Access to market information, whether directly or through
formal or informal institutional arrangements, is critical for market participation. The size of
the household and ownership of means of transport are critical in determining the intensity of
market participation. The geographical location of the household affects market participation,
since some locations have better infrastructure and hence are more commercialized. Policies
aimed at encouraging market information access, investments in rural infrastructure and
collective action by farmers may help to lower transaction costs and thus enhance market
participation.