nep-isf New Economics Papers
on Islamic Finance
Issue of 2018‒09‒10
two papers chosen by
Halimatun Aris

  1. Religion, food choices, and demand seasonality: Evidence from the Ethiopian milk market By D'Haene, E.; Desiere, S.; D'Haese, M.; Verbeke, W.; Schoors, K.
  2. The Role of Farmer’s Trust, Risk and Time Preferences for Contract Choices: Experimental Evidence from the Ghanaian Pineapple Sector By Fischer, Sabine; Wollni, Meike

  1. By: D'Haene, E.; Desiere, S.; D'Haese, M.; Verbeke, W.; Schoors, K.
    Abstract: This paper addresses the role of religious practices on market outcomes. We study the Ethiopian milk market what amounts to a natural experiment influenced by different Christian, Islamic and traditional faiths. Focal point of this article are the fasting rituals characterized by the abstinence of animal products, a fundamental pillar of Orthodox Christianity, the dominant religious group within Ethiopia. Employing country-wide data collected by the Living Standards Measurement Studies, we find, much to our surprise, that the fasting rituals of the Orthodox Christian society adversely affects both milk demand in Orthodox and local Muslim communities alike. The direct effect on Orthodox groups and the spillovers to Muslim networks create important market inefficiencies. The religion-related demand cycles are particularly challenging to government policies that aim to develop the livestock sector. Keywords: Consumer behavior, Collective fasting rituals, Intentional demand seasonality, Livestock sector development and policies, Religion, Market inefficiencies
    Keywords: International Development, Livestock Production/Industries
    Date: 2018–07
  2. By: Fischer, Sabine; Wollni, Meike
    Abstract: In the last decades global food value chains have seen the need for increasing vertical coordination in order to secure quality standards. A prominent way to govern the relationships between farmers and agri-business firms are farming contracts. We study the role of trust, risk and time preferences for farmers' contract choices in a discrete choice experiment among Ghanaian pineapple farmers. We find that experimental measures of trust, risk and time preferences can predict preferences for contract attributes. Especially trust has economically important effects on the willingness to pay for transparent quality controls. Differences in preferences for timing of payment and timing of agreement making cannot be explained by trust levels but by time preferences. Risk-sharing in form of reduced quality requirements is less important for risk-seeking individuals compared to risk-neutral or risk-averse farmers. Including behavioral preferences can significantly improve the explanatory power of the models. Our results indicate that preferences affect farmers' participation constraints and argue that a diversification of contract offers might increase the willingness of farmers to participate in contract farming. This has implications for companies who aim at developing stable long-term relationships with farmers.
    Keywords: Agribusiness, Institutional and Behavioral Economics, International Development
    Date: 2017–11–13

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