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Unpublished Paper
Friends or traders? Do social networks explain the use of market mechanisms by farmers in India?
(2015)
  • Tisorn Songsermsawas, University of Illinois at Urbana-Champaign
  • Kathy Baylis, University of Illinois at Urbana-Champaign
  • Ashwini Chhatre
  • Hope Michelson, University of Illinois at Urbana-Champaign
  • Satya Prasanna
Abstract

A farmer's long-term relationship with a trader can improve access to market information, but removes the farmer's option to sell to other traders in any specific year. Social networks could ace either as substitutes to traders, helping disseminate market information and fostering economies of scale, or as complements, where farmers help build relationships between their trader and their peers. Using a household survey from India, we investigate whether and how social networks are associated with a farmer's choice to enter into a long-term relationship with a trader. We find that peers directly affect this choice. Further, we find that network characteristics and the household's position within the network influence the decision to have a long-term relationship. Specifically, the more central the household and the smaller number of connections with other households, the higher the likelihood a household has a long-term relationship with a trader.

Keywords
  • social networks,
  • trader,
  • India,
  • market access,
  • spatial econometrics,
  • contract farming
Publication Date
2015
Citation Information
Tisorn Songsermsawas, Kathy Baylis, Ashwini Chhatre, Hope Michelson, et al.. "Friends or traders? Do social networks explain the use of market mechanisms by farmers in India?" (2015)
Available at: http://works.bepress.com/kathy_baylis/66/