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1 – 10 of over 2000Genanew Bekele, Reza H. Chowdhury and Ananth Rao
The purpose of this paper is to consider borrower-specific characteristics to understand the factors affecting both the probability and quantum of loan default by individual…
Abstract
Purpose
The purpose of this paper is to consider borrower-specific characteristics to understand the factors affecting both the probability and quantum of loan default by individual borrowers under Islamic and conventional banking.
Design/methodology/approach
Borrower-specific characteristics that explain the probability of default may not necessarily be similar factors that determine the quantum of default. The authors therefore apply a Box-Cox double hurdle model to treat both the probability and quantum of default in a two-step approach. The authors also explain the differences in default risk and quantum of default between Islamic and conventional banking borrowers from their behavioral perspectives following the Sharia principles in financial transactions between lenders and borrowers. The authors use borrower-specific information of two separate bank branches of the United Arab Emirates that solely deal with either Islamic or conventional banking products.
Findings
The paper demonstrates that the probability of default and the quantum of default appear to be influenced by different set of client-specific factors. The results suggest that the probability of default does not vary significantly between Islamic and conventional banking borrowers. The evidence also shows that Islamic banking defaulters, compared to those in conventional banking, repay a large quantum of overdue when their financial leverage improves. However, they do not tend to reduce their outstanding quantum of overdue faster than conventional banking defaulters.
Research limitations/implications
Availability of data from only two bank branches may limit the explanatory power of empirical findings.
Practical implications
The study findings will enable the Islamic and conventional banks to appropriately address Basel Capital requirements based on the borrowers’ behavior.
Social implications
The study findings have the potential for Islamic and conventional financing institutions to be more flexible with equity in their lending practices.
Originality/value
Religious beliefs are crucial in borrower’s default behavior in Islamic banking.
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Jingjing Wang, Yongfu Chen, Zhihao Zheng and Wei Si
The purpose of this paper is to investigate the determinants of pork consumption in urban western China and the different consumption patterns across income strata with respect to…
Abstract
Purpose
The purpose of this paper is to investigate the determinants of pork consumption in urban western China and the different consumption patterns across income strata with respect to income elasticity and price elasticity of demand.
Design/methodology/approach
The double-hurdle model is fit to the household data of Sichuan and Xinjiang provinces which is from the National Bureau of Statistics urban household surveys.
Findings
The paper finds that consumers’ purchasing decisions regarding pork are related to both non-economic and economic factors. The results also indicate large differences among the determinants for decision of how much pork to buy across the three income strata. Low-income households have higher income elasticity than middle-income and high-income households. High-income and middle-income households’ level of pork consumption is more sensitive to pork price. High-income households have greater cross-price elasticity.
Originality/value
In the previous studies, the non-economic determinants of pork consumption have not been addressed, and neither does the issue of difference pork purchasing behavior across income strata for urban households in western China. So this study uses the double-hurdle model to investigate the determinants of pork consumption in urban western China.
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Ashok K. Mishra and Hung‐Hao Chang
The purpose of this paper is to empirically investigate the effects of farm income variability, farm size, and other socio‐demographic characteristics on the precautionary saving…
Abstract
Purpose
The purpose of this paper is to empirically investigate the effects of farm income variability, farm size, and other socio‐demographic characteristics on the precautionary saving behavior of farm households and to estimate the influences of the identified factors on the amount of savings by self‐employed farm households.
Design/methodology/approach
Using 2003 Agricultural Resource Management Survey (ARMS) data and a Double‐Hurdle procedure, the likelihood and the amount of savings by farm households are estimated.
Findings
An important empirical finding of this study is that variability in income plays an important role in explaining precautionary savings of US farm households. Findings suggest that farm households facing higher income risk save more and accumulate more wealth. It is indicated that several farm, operator, household, and demographic attributes contribute to the precautionary savings of farm households. In particular, results show that educational attainment by operator and spouses have positive impact on the decision to save. In addition, results from this study show that farms that specialize in cash grain are likely to have precautionary savings.
Practical implications
Farm households today are virtually indistinguishable from non‐farm households in their levels of income and diversity of employment. As a result, government policies that influence general economic conditions have much more profound impacts on farm families. Federal support of farm income warrants continued scrutiny. This paper shows that greater income uncertainty increases savings and wealth of farm households. Therefore, farm policies that reduce income variability or uncertainty will have an impact on precautionary savings and wealth of farm households.
Originality/value
Several studies have investigated savings of households; however, these studies are limited to entire US population, older Americans, or non‐self‐employed individuals in the USA. Little is known about the savings behavior of self‐employed US farm households owing to a lack of household survey data and because of the complex relationship between the farm household and farm business in terms of resource allocation (both capital and labor).
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Josephine Cherotich, Kenneth Waluse Sibiko and Oscar Ingasia Ayuya
Inadequate finance is considered a major factor limiting the growth of small-scale women-owned farm enterprises in Sub-Saharan Africa. Women empowerment programs such as table…
Abstract
Purpose
Inadequate finance is considered a major factor limiting the growth of small-scale women-owned farm enterprises in Sub-Saharan Africa. Women empowerment programs such as table banking (TB) and women enterprise fund were initiated in an attempt to curb the credit gap affecting women in agribusiness. This paper determines the factors influencing the extent of credit access among women farm-entrepreneurs who are either members or nonmembers of TB groups in Kenya.
Design/methodology/approach
The study was conducted in Kericho County using a sample of 384 respondents. Factor analysis was used to generate three indicators of entrepreneurial orientation which were included as explanatory variables in the regressions. Double hurdle econometric model was employed to analyze the factors influencing the decisions on credit uptake and amount of borrowed loan. Separate models were estimated for members and nonmembers of TB groups since they differed in volume and source of loan accessed.
Findings
Results reveal that age of the woman and innovativeness negatively influenced credit access, whereas education level, participation in off-farm activities, number of farm enterprises, perception on interest rate, extension contacts and financial knowledge positively influenced the decision to access credit. On the other hand, participation in off-farm activities, risk-taking behavior, total land size, extension access and financial knowledge were statistically significant with positive correlation on the amount of loan borrowed. Significant factors differ between members and nonmembers of TB groups implying divergence in underlying credit access challenges once one has joined such groups.
Research limitations/implications
The study did not consider supply-side factors affecting the amount of loan accessed by women farm-entrepreneurs.
Originality/value
To the best of the authors’ knowledge, this paper is one of the pioneer studies using the double hurdle model to analyze factors influencing the extent of credit access specifically among women farm-entrepreneurs and carrying out the analysis by membership in TB groups.
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Rakshananda Kousar, Tahira Sadaf, Muhammad Sohail Amjad Makhdum and Ayesha Ijaz
This study aims to estimate the determinants of household spending on education and nutrition. Education and nutrition are noteworthy elements for human development and welfare…
Abstract
Purpose
This study aims to estimate the determinants of household spending on education and nutrition. Education and nutrition are noteworthy elements for human development and welfare. Separate estimates are being provided for male and female as gender determines household welfare and gender-based analysis of household spending evaluates the aptitude of decision power as well as measures their influential role in human welfare.
Design/methodology/approach
Fruits, milk and dairy products are taken as proxy of substantial portion of nutrition. The study used primary urban household-level data that collected from Faisalabad city. The authors used double hurdle model.
Findings
The findings of the study show that females are more likely to spend on education. Household size and number of children negatively determine the household spending on education and nutrition. Number of employed household members, level of income and education are positively associated with household spending on education and nutrition by male- and female-headed households. A very low public spending on education and nutrition have led to upsurge the hurdles of households in Pakistan.
Practical implications
The study recommends that government should provide the employment opportunities, especially for females for stable and increased household income that leads to improve the household welfare.
Originality/value
Several studies have examined the education spending (Mbanefoh et al., 1997; Ichoku and Leibbrandt, 2003; Donkoh and Amikuzuno, 2011; Cisse, 2011), but these studies ignored to investigate the gender role and household spending on nutrition and education. This study is crucial in drawing suitable policy recommendations for household welfare. This study filled the gaps and scrutinized the issues that interrelated with household spending.
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Péter Elek, János Köllő, Balázs Reizer and Péter A. Szabó
We estimate a double-hurdle (DH) model of the Hungarian wage distribution assuming censoring at the minimum wage and wage under-reporting (i.e. compensation consisting of the…
Abstract
We estimate a double-hurdle (DH) model of the Hungarian wage distribution assuming censoring at the minimum wage and wage under-reporting (i.e. compensation consisting of the minimum wage, subject to taxation and an unreported cash supplement). We estimate the probability of under-reporting for minimum wage earners, simulate their genuine earnings and classify them and their employers as ‘cheaters’ and ‘non-cheaters’. In the possession of the classification, we check how cheaters and non-cheaters reacted to the introduction of a minimum social security contribution base, equal to 200 per cent of the minimum wage, in 2007. The findings suggest that cheaters were more likely to raise the wages of their minimum wage earners to 200 per cent of the minimum wage, thereby reducing the risk of tax audit. Cheating firms also experienced faster average wage growth and slower output growth. The results suggest that the DH model is able to identify the loci of wage under-reporting with some precision.
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Reuben Jagri Binpori, Dadson Awunyo-Vitor and Camillus Abawiera Wongnaa
In order to improve access to resources for smallholder farmers, efforts are being made to promote contract farming in Ghana. This is seen as a strategy to increase agricultural…
Abstract
Purpose
In order to improve access to resources for smallholder farmers, efforts are being made to promote contract farming in Ghana. This is seen as a strategy to increase agricultural productivity of farmers, give better market access and guarantee adequate supply of raw materials to agro-based industries. However, the challenge is whether contract farming leads to improvement in food security status of farmers. The study therefore seeks to explore to what extent farmers' food security status is influenced by their participation in contract farming activities.
Design/methodology/approach
Using Cragg's double-hurdle model to analyse participation in contract farming, the authors control for selection bias using propensity score matching applied to a data set of 336 observations to examine the impact of contract farming on the food security levels of rice farmers in Ghana.
Findings
The results of this study show that yield of paddy and the wealth of the farmer are the main factors that influence the quantity of paddy rice to be contracted in contract farming arrangements. This study also finds that participation in contract farming will increase food security by 109%. In conclusion, contract farming has a significant positive impact on the farmers' food security status.
Originality/value
Agricultural policies and rural development initiatives supporting the promotion and expansion of contract farming should be pursued to persuade more farmers to produce under contract farming agreements.
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Adam Hoffer, Rejeana Gvillo, William Shughart and Michael Thomas
The purpose of this paper is to identify how consumption of 12 goods – alcohol, cigarettes, fast food, items sold at vending machines, purchases of food away from home, cookies…
Abstract
Purpose
The purpose of this paper is to identify how consumption of 12 goods – alcohol, cigarettes, fast food, items sold at vending machines, purchases of food away from home, cookies, cakes, chips, candy, donuts, bacon, and carbonated soft drinks – varies across the income distribution by calculating their income-expenditure elasticites.
Design/methodology/approach
Data on 22,681 households from 2009-2012 from the Bureau of Labor Statistics’ Consumer Expenditure Survey were used. The data were analyzed using ordinary least squares regressions and Cragg’s double hurdle model which integrates a binary model to determine the decision to consume and a truncated normal model to estimate the effects for conditional (y>0) consumption.
Findings
Income had the greatest effect on expenditures for alcohol (0.314), food away from home (0.295), and fast food (0.284). A one percentage-point increase in income (approximately $428 at the mean) translated into a 0.314 percentage-point increase in spending on alcoholic beverages (approximately $1 annually at the mean). Income had the smallest influence on tobacco expenditures (0.007) and donut expenditures (−0.009).
Research limitations/implications
Percentage of a household’s discretionary budget spent on the studied goods falls substantially as income gets larger. Policies targeting the consumption of such goods will disproportionately impact lower income households.
Originality/value
This is the first manuscript to calculate income-expenditure elasticities for the goods studied. The results allow for a direct analysis of targeted consumption policy on household budgets across the income distribution.
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Mehmet Bozoglu, Abdulbaki Bilgic, Chung L. Huang, Wojciech J. Florkowski and Bakiye Kilic Topuz
The purpose of this paper is to examine urban households’ willingness to pay (WTP) for milk safety and to analyze the factors affecting WTP premiums using data obtained from…
Abstract
Purpose
The purpose of this paper is to examine urban households’ willingness to pay (WTP) for milk safety and to analyze the factors affecting WTP premiums using data obtained from surveys conducted in Samsun and Trabzon provinces, Turkey.
Design/methodology/approach
Contingent valuation and censoring methods including the error-dependent bivariate Heckman SS model were used for estimating WTP for milk safety and its effective factors, respectively.
Findings
The study indicates that 68 percent of the households were willing to pay 0.35 per liter for improving the safety of milk. The model results show that satisfaction with food safety standards, being married and full-time employment have statistically significant positive effects on the WTP for ISO-certified milk. However, purchasing milk from farmers or open-air markets, age, having a child six-year old or younger, and high school or higher education have statistically significant negative effects on the WTP for ISO-certified milk.
Research limitations/implications
The main limitation of the current study is that only urban consumers’ WTP and effective factors for milk safety were examined in two provinces of Turkey.
Practical implications
More rigorous implementations of food safety standards, traceability systems and effective educational campaigns could promote households’ food safety awareness and increase their demand for milk safety.
Social implications
Knowing what factors are involved in consumer WTP is extremely important for decision makers to create new social policies in the region or country.
Originality/value
A similar study has not been conducted in Turkey. The novelty of this study is the specification and robust estimation of three different but competing models to reveal the wide range of WTP amounts for safe milk.
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Kwame Asiam Addey, John Baptist D. Jatoe and George Tsey-Mensah Kwadzo
The aim of this paper is to identify the factors that influence rice farmers' decisions to adopt crop insurance and premium payments (willingness to pay [WTP] amounts). The paper…
Abstract
Purpose
The aim of this paper is to identify the factors that influence rice farmers' decisions to adopt crop insurance and premium payments (willingness to pay [WTP] amounts). The paper also demonstrates the usefulness of the complementary log-log (cloglog) truncated Poisson double-hurdle model as an alternative hurdle model.
Design/methodology/approach
The study first investigated the nature of the dependent variable, which had non-normal residuals and was overdispersed. The probit truncated normal regression double-hurdle model was tried but it failed the normality and homoscedasticity tests; hence, the cloglog truncated Poisson double-hurdle model was employed in the study.
Findings
An estimated 61% of respondents would purchase crop insurance, despite farmers not having prior experience with this product. Amongst others, the factors that influence insurance adoption amongst rice farmers are the share of rice in total income, reliability perception of crop insurance schemes and the probability of failure to achieve target yields. The latter helps the authors to address adverse selection, a central issue to the viability of such an insurance programme. The determinants of farmers' WTP are also identified.
Research limitations/implications
Sampling was limited to farmers using irrigation and living in one region of Ghana, which may limit the study’s wider applicability.
Originality/value
As far as the authors are aware, this study is the first to select the appropriate hurdle model based on established properties of the dependent variable on this topic – crop insurance decisions.
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