The Determinants of Polish Farmers' Credit Interest Rates: Hedonic Price Analysis and Implications for Government Policy
AbstractOur micro-econometric analysis of agricultural credit market outcomes in Poland sheds new light on the relationship between contractual arrangements and interest rates. An innovative theoretical framework based on a hedonic market model is developed. We interpret the factors that influence interest rates as "quality" components of the credit contract. We use unique data including detailed information about Polish farmers' credit contracts. Both nominal interest rates and bank fees are considered. Results show that banks prefer liquid types of collateral, and care little about the loan's purpose. The effect of government subsidies on interest rates is small compared to the officially declared reduction of the nominal rate.
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Bibliographic InfoPaper provided by European Association of Agricultural Economists in its series 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark with number 24757.
Date of creation: 2005
Date of revision:
agricultural finance; credit policy; hedonic regression; micro-econometrics; Poland; Agricultural and Food Policy; Financial Economics; Q12; Q14; P32;
Find related papers by JEL classification:
- Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
- Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance
- P32 - Economic Systems - - Socialist Institutions and Their Transitions - - - Collectives; Communes; Agricultural Institutions
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