IDEAS home Printed from https://ideas.repec.org/a/gam/jlands/v11y2022i8p1157-d872269.html
   My bibliography  Save this article

Heterogeneous Preferences for Selecting Attributes of Farmland Management Right Mortgages in Western China: A Demand Perspective

Author

Listed:
  • Yanling Peng

    (College of Economics, Sichuan Agricultural University, Chengdu 611130, China)

  • Yuansheng Jiang

    (College of Economics, Sichuan Agricultural University, Chengdu 611130, China)

  • Yu Hong

    (Institute of Agricultural Economics and Development, Chinese Academy of Agricultural Sciences, Beijing 100081, China)

Abstract

Farmland management right mortgages (FMRMs) are emerging land financing products in China. However, the development of FMRMs and farmers’ demands for them are poorly understood. This study applied an in-the-field choice experiment of 1815 farmers, conducted in China, to examine farmers’ demands for FMRMs and explore their heterogeneous preferences regarding the attributes of FMRMs. Results from the random parameters logit model suggest that farmers are interest-rate sensitive and willing to pay for FMRM products that use farmland management rights as the sole collateral, enabling amortization, and without insurance and guarantee requirements. Results from the latent class model further suggest that guarantee takers strongly prefer lump-sum repayments and are more inclined to select insurance and guarantees relative to their counterparts, while guarantee averters strongly prefer to pay off loans with amortization and have positive propensities to purchase insurance. Moreover, female farmers with high education levels, entity identities, and loan experiences are more willing to pay off their loans at once and purchase insurance. Our findings provide insight into the roles of financial product attributes and borrowers’ characteristics in their demand for FMRMs. It may facilitate the design of optimal portfolios and adoption incentives for land mortgage products.

Suggested Citation

  • Yanling Peng & Yuansheng Jiang & Yu Hong, 2022. "Heterogeneous Preferences for Selecting Attributes of Farmland Management Right Mortgages in Western China: A Demand Perspective," Land, MDPI, vol. 11(8), pages 1-14, July.
    • Handle: RePEc:gam:jlands:v:11:y:2022:i:8:p:1157-:d:872269
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2073-445X/11/8/1157/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2073-445X/11/8/1157/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Lin, Justin Yifu, 1988. "The Household Responsibility System in China's Agricultural Reform: A Theoretical and Empirical Study," Economic Development and Cultural Change, University of Chicago Press, vol. 36(3), pages 199-224, Supplemen.
    2. Gershon Feder & Tongroj Onchan & Tejaswi Raparla, 1988. "Collateral, Guaranties and Rural Credit in Developing Countries: Evidence from Asia," Agricultural Economics, International Association of Agricultural Economists, vol. 2(3), pages 231-245, November.
    3. Daniel McFadden & Kenneth Train, 2000. "Mixed MNL models for discrete response," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 15(5), pages 447-470.
    4. Jayson L. Lusk & Ted C. Schroeder, 2004. "Are Choice Experiments Incentive Compatible? A Test with Quality Differentiated Beef Steaks," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(2), pages 467-482.
    5. Jayson L. Lusk & Jutta Roosen & John A. Fox, 2003. "Demand for Beef from Cattle Administered Growth Hormones or Fed Genetically Modified Corn: A Comparison of Consumers in France, Germany, the United Kingdom, and the United States," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(1), pages 16-29.
    6. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521766555.
    7. Peng, Yan-ling & Ren, Yanjun & Li, Hou-jian, 2021. "Do credit constraints affect households' economic vulnerability? Empirical evidence from rural China," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 20(9), pages 2552-2568.
    8. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74(2), pages 132-132.
    9. Apurba Shee & Calum G. Turvey & Ana Marr, 2021. "Heterogeneous Demand and Supply for an Insurance‐linked Credit Product in Kenya: A Stated Choice Experiment Approach," Journal of Agricultural Economics, Wiley Blackwell, vol. 72(1), pages 244-267, February.
    10. Ortega, David L. & Wang, H. Holly & Wu, Laping & Olynk, Nicole J., 2011. "Modeling heterogeneity in consumer preferences for select food safety attributes in China," Food Policy, Elsevier, vol. 36(2), pages 318-324, April.
    11. Hongguang Zheng & Zhanbin Zhang, 2021. "Analyzing Characteristics and Implications of the Mortgage Default of Agricultural Land Management Rights in Recent China Based on 724 Court Decisions," Land, MDPI, vol. 10(7), pages 1-16, July.
    12. Hanemann, W Michael, 1984. "Discrete-Continuous Models of Consumer Demand," Econometrica, Econometric Society, vol. 52(3), pages 541-561, May.
    13. Apurba Shee & Calum G. Turvey, 2012. "Collateral-free lending with risk-contingent credit for agricultural development: indemnifying loans against pulse crop price risk in India," Agricultural Economics, International Association of Agricultural Economists, vol. 43(5), pages 561-574, September.
    14. Xi Yang & Jianchao Luo & Wenshou Yan, 2018. "Heterogeneous effects of rural land property mortgage loan program on income," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 10(4), pages 695-711, July.
    15. Teichert, Thorsten & Shehu, Edlira & von Wartburg, Iwan, 2008. "Customer segmentation revisited: The case of the airline industry," Transportation Research Part A: Policy and Practice, Elsevier, vol. 42(1), pages 227-242, January.
    16. Xinhua Gu & Yang Zhang & Xiaolin Qian & Haizhen Guo, 2016. "The suspension of borrowing: an implicit penalty for loan default under imperfect information," Applied Economics, Taylor & Francis Journals, vol. 48(60), pages 5882-5896, December.
    17. Janna Johnson, 2009. "Rural Economic Development in the United States," Economic Development Quarterly, , vol. 23(3), pages 229-241, August.
    18. Peter Boxall & Wiktor Adamowicz, 2002. "Understanding Heterogeneous Preferences in Random Utility Models: A Latent Class Approach," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 23(4), pages 421-446, December.
    19. Ward, Patrick S. & Ortega, David L. & Spielman, David J. & Singh, Vartika, 2014. "Heterogeneous Demand for Drought-Tolerant Rice: Evidence from Bihar, India," World Development, Elsevier, vol. 64(C), pages 125-139.
    20. Katrina J. Davis & Michael Burton & Marit E. Kragt, 2019. "Scale Heterogeneity and Its Implications for Discrete Choice Analysis," Land Economics, University of Wisconsin Press, vol. 95(3), pages 353-368.
    21. Wibke Crewett & Benedikt Korf, 2008. "Ethiopia: Reforming Land Tenure," Review of African Political Economy, Taylor & Francis Journals, vol. 35(116), pages 203-220, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hui Luo & Zhaomin Hu & Xiuping Hao & Nawab Khan & Xiaojie Liu, 2022. "Assessment and Comparison of Agricultural Technology Development under Different Farmland Management Modes: A Case Study of Grain Production, China," Land, MDPI, vol. 11(11), pages 1-24, October.
    2. Yiru Wang & Honggang Lu & Yuge Chen & Peiwen Yang & Xiangbo Cheng & Fangting Xie, 2023. "The Impact of Farmland Management Rights Mortgage Loan on the Agri-Food Industrial Agglomeration: Case of Hubei Province," Land, MDPI, vol. 12(7), pages 1-17, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Peng, Yanling & Ren, Yanjun & Zhong, Yu & Jiang, Yuansheng, 2022. "Farmers’ Heterogeneous Preferences for Selecting Attributes of Farmland Management Right Mortgages: Evidence from Western China," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322408, Agricultural and Applied Economics Association.
    2. Shijiu Yin & Shanshan Lv & Yusheng Chen & Linhai Wu & Mo Chen & Jiang Yan, 2018. "Consumer preference for infant milk‐based formula with select food safety information attributes: Evidence from a choice experiment in China," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 66(4), pages 557-569, December.
    3. Ortega, David L. & Wang, H. Holly & Wu, Laping & Olynk, Nicole J., 2011. "Modeling heterogeneity in consumer preferences for select food safety attributes in China," Food Policy, Elsevier, vol. 36(2), pages 318-324, April.
    4. Apurba Shee & Calum G. Turvey & Ana Marr, 2021. "Heterogeneous Demand and Supply for an Insurance‐linked Credit Product in Kenya: A Stated Choice Experiment Approach," Journal of Agricultural Economics, Wiley Blackwell, vol. 72(1), pages 244-267, February.
    5. Wang, Shuxian & Wu, Linhai & Zhu, Dian & Wang, Hongsha & Xu, Lingling, 2014. "Chinese consumers’ preferences and willingness to pay for traceable food attributes: The case of pork," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 165639, Agricultural and Applied Economics Association.
    6. H. Holly Wang & Lu Liu & David L. Ortega & Yu Jiang & Qiujie Zheng, 2020. "Are smallholder farmers willing to pay for different types of crop insurance? An application of labelled choice experiments to Chinese corn growers," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 45(1), pages 86-110, January.
    7. Wu, Linhai & Wang, Shuxian & Zhu, Dian & Hu, Wuyang & Wang, Hongsha, 2015. "Chinese consumers’ preferences and willingness to pay for traceable food quality and safety attributes: The case of pork," China Economic Review, Elsevier, vol. 35(C), pages 121-136.
    8. Qingyin Cai & Yulian Ding & Calum Tuvey & Yuehua Zhang, 2021. "The influence of past experience on farmers’ preferences for hog insurance products: a natural experiment and choice experiment in China," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 46(3), pages 399-421, July.
    9. Abedullah, A. & Kouser, S. & Ibrahim, M., 2018. "Consumer preferences and willingness to pay for Aflatoxin- Free Milk in Pakistan," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 275957, International Association of Agricultural Economists.
    10. Doherty, Edel & Campbell, Danny, 2011. "Demand for improved food safety and quality: a cross-regional comparison," 85th Annual Conference, April 18-20, 2011, Warwick University, Coventry, UK 108791, Agricultural Economics Society.
    11. Khan, Md. Tajuddin & Kishore, Avinash & Joshi, Pramod Kumar, 2016. "Gender dimensions on farmers’ preferences for direct-seeded rice with drum seeder in India:," IFPRI discussion papers 1550, International Food Policy Research Institute (IFPRI).
    12. Carnegie, Rachel & Wang, Holly & Widmar, Nicole & Ortega, David, 2014. "Consumer Preferences for Quality and Safety Attributes of Duck in Restaurant Entrees: Is China A Viable Market for The U.S. Duck Industry?," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170717, Agricultural and Applied Economics Association.
    13. Ward, Patrick S. & Ortega, David L. & Spielman, David J. & Singh, Vartika, 2013. "Farmer preferences for drought tolerance in hybrid versus inbred rice: Evidence from Bihar, India:," IFPRI discussion papers 1307, International Food Policy Research Institute (IFPRI).
    14. Rajo, Lindelly A. & Michelle S, Segovia & Arias, Fredi & Marco A., Palma, 2016. "Willingness-to-Pay for an Educational Label: The Zamorano University Brand," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 19(1), pages 1-14, February.
    15. Hoyos, David, 2010. "The state of the art of environmental valuation with discrete choice experiments," Ecological Economics, Elsevier, vol. 69(8), pages 1595-1603, June.
    16. Chen, Junhong & Wang, H. Holly & Bai, Junfei & Lai, John, 2017. "Consumers’ Willingness-to-Pay of Different Pork Preservation Methods in Chinese Retail Market," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 257247, Agricultural and Applied Economics Association.
    17. Domenico Carlucci & Biagia De Devitiis & Gianluca Nardone & Fabio Gaetano Santeramo, 2017. "Certification Labels Versus Convenience Formats: What Drives the Market in Aquaculture Products?," Marine Resource Economics, University of Chicago Press, vol. 32(3), pages 295-310.
    18. Wongprawmas, Rungsaran & Canavari, Maurizio, 2015. "Heterogeneity in consumer preferences for food safety lavel in Thailand," 143rd Joint EAAE/AAEA Seminar, March 25-27, 2015, Naples, Italy 202744, European Association of Agricultural Economists.
    19. Haghani, Milad & Bliemer, Michiel C.J. & Hensher, David A., 2021. "The landscape of econometric discrete choice modelling research," Journal of choice modelling, Elsevier, vol. 40(C).
    20. Wongprawmas, Rungsaran & Canavari, Maurizio, 2017. "Consumers’ willingness-to-pay for food safety labels in an emerging market: The case of fresh produce in Thailand," Food Policy, Elsevier, vol. 69(C), pages 25-34.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jlands:v:11:y:2022:i:8:p:1157-:d:872269. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.