IDEAS home Printed from https://ideas.repec.org/a/taf/oxdevs/v37y2009i4p363-395.html
   My bibliography  Save this article

Safety Net Perception and its Effects on Household Investment in Developing Countries: Chemical Fertilizer Input by Cambodian Farmers

Author

Listed:
  • Kenjiro Yagura

Abstract

Farmers in developing countries are reluctant to make investments for fear of failure and the economic distress resulting from this, but the perception of protection by a safety net may induce farmers to invest by reducing that fear. Using Cambodian farm household data, this paper examines factors affecting the perception of protection by a safety net and then assesses the effect of this perception on farmers' investment. For empirical analyses, perceived credit availability from relatives represents this perceived safety net; and chemical fertilizer input signifies the investment size. The results of the econometric analysis demonstrate that farm households with higher economic status, who are able to repay a loan or favour, are more likely to perceive such a safety net. It is also shown that the safety net perception positively affects chemical fertilizer input, implying that farmers accept risk when they perceive a safety net. These findings suggest that it is not only a lack of capital that deters poor households from investment, but also the perceived lack of a safety net.

Suggested Citation

  • Kenjiro Yagura, 2009. "Safety Net Perception and its Effects on Household Investment in Developing Countries: Chemical Fertilizer Input by Cambodian Farmers," Oxford Development Studies, Taylor & Francis Journals, vol. 37(4), pages 363-395.
  • Handle: RePEc:taf:oxdevs:v:37:y:2009:i:4:p:363-395
    DOI: 10.1080/13600810903305216
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/13600810903305216
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Jacob Nielsen Arendt & Anders Holm, 2006. "Probit Models with Binary Endogenous Regressors," CAM Working Papers 2006-06, University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics.
    2. Jha, D. (Dayanatha) & Hojjati, Behjat, 1993. "Fertilizer use on smallholder farms in Eastern Province, Zambia:," Research reports 94, International Food Policy Research Institute (IFPRI).
    Full references (including those not matched with items on IDEAS)

    More about this item

    Statistics

    Access and download statistics

    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:taf:oxdevs:v:37:y:2009:i:4:p:363-395. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Chris Longhurst). General contact details of provider: http://www.tandfonline.com/CODS20 .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.