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- Title
Do formal credit constraints affect the rural household consumption in China?
- Authors
JIANMEI ZHAO; JUN ZHANG; BARRY, PETER J.
- Abstract
The article investigates the consequences of credit constraints on rural household consumption in China. Based on a unique rural finance and consumption survey, the authors first identify the credit constraint status of rural households from formal financial institutions. Then, they apply an endogenous switching regression model to compare the consumption responses to household production inputs for credit constrained and non-constrained households. The estimation results reveal that the credit constraint could result in the crowding out effect of the aggregate household consumption from its production inputs. Nonetheless, similar to the non-constrained households, the credit constraint households are capable of smoothing their necessary consumption.
- Subjects
CHINA; HOUSEHOLDS; RURAL population; CONSUMPTION (Economics); REGRESSION analysis; AGRICULTURAL productivity; RURAL credit
- Publication
Agricultural Economics / Zemědělská Ekonomika, 2014, Vol 60, Issue 10, p458
- ISSN
0139-570X
- Publication type
Article
- DOI
10.17221/161/2013-agricecon