Determinants of honey producer market outlet choice in Chena District, southern Ethiopia: a multivariate probit regression analysis

Abstract

Marketing outlets choice is one of the most important farm household decisions to sell their produce and has a great impact on household income. Though the study area has great potential of honey production, the farmers in the study area faced the marketing problem in choice of appropriate honey market outlets. This study was therefore carried out to analyze determinants of honey producers' market outlet choice decisions in Chena district. A total of 154 honey-producing households were surveyed, and the data obtained were analyzed by using multivariate probit model. The results show that most sampled households in the study area sell their honey to cooperative outlet as compare to other outlets. The results of the econometric model show the dependency of household level marketing decisions as a strategy to maximize their incomes in the long term. The model results also reveal that the quantity of honey sold, frequency extension contact, beekeeping experience, distance to nearest market, market information about each outlet, cooperative membership, and trust in buyers determine market outlet choice decision of honey producers in the study area. Expanding equal accessibility of infrastructures, establishing honey collection centers in potential production areas, increasing the frequency of extension contact, and organizing additional beekeepers into honey cooperatives is suggested.

Urban and Peri-urban Milk Market Channel Choice Using Multivariate Probit Approach: Evidence from Arsi Highland of Ethiopia

“…Likewise, assembler purchase milk at the farm gate from dairy HHs by doing door to door collection which reduces the transaction cost associated with milk marketing. This result is consistent with the study by Bardhan et al (2012), Moturi et al (2015), and Tarekegn et al (2017). Regarding, the cafeteria/restaurant channel, the plausible explanation for the negative association with distance is that most of the cafeterias/restaurant requires dairy farm HHs to deliver their milk to the cafeteria/restaurant on a daily base, which is time taking and transaction cost inducing requirement for the dairy farm households.…”

“…The multivariate probit also allows the error terms to be correlated, with joint normally distributed error for all i with N ~ ) 1 , 0 ( and can be used to estimate the parameters of more than two successive dichotomous choice questions (Araña & León, 2007). Several market channel choice studies have been done by using a multinomial logit (Abera Negeri, 2017;Demissie et al, 2018;Emana, Ketema, Mutimba, & Yousuf, 2015;Kihoro et al, 2016;Kuma et al, 2013;Mmbando et al, 2016;Nyaga, Nyikal, & Busienei, 2016), however, few studies have been done using a multivariate probit model (Abera, 2016;Arinloye et al, 2015;Hailu, 2017;Tarekegn, Haji, & Tegegne, 2017). One of the underlying assumptions of multinomial logit models is the independence of irrelevant alternative that is error terms of the market channel choice equations are mutually exclusive (Greene, 2000).…”

“…A study on maize and pigeon pea producers in Tanzania showed five major factors affecting market selection, such as transaction costs, access to credit, household wealth, extension services, and social capital (Mmbando et al, 2016). Another study on honey producer market outlet choice in Ethiopia revealed seven factors affecting market channel choices, such as quantity sold, beekeeping experience, extension contact, distance to the nearest market, market information, cooperative membership, and trust in buyers (Tarekegn et al, 2017). Although a study in Rural South Africa on cattle marketing channels showed that transaction costs, festive season, knowledge of the buyer, volume supplied and farmer's age affected cattle marketing channel choice (Ndoro, Mudhara, Chimonyo, & Hitayezu, 2015).…”

Factors affecting market outlet choice of wheat producers in North Gondar Zone, Ethiopia

“…Similarly, producers select their marketing plans and assess outside options that are available before participating in alternative wheat market channels and choose relevant market outlets based on utility maximization among existing alternatives, comparative advantage in bargaining and accessibility of channels for farm products [19]. However, smallholder farmers' decision to select appropriate market outlets can be affected by various factors such as demographic, institutional factors, socioeconomic factors and access of market outlets [4,16,[18][19][20].…”

Determinants of Wheat Market Outlet Choice of Smallholder Farmers: The Case of Dembecha District, Amhara National Regional State, Ethiopia

“…Multinomial models are appropriate when individuals can choose only one outcome from among the set of mutually exclusive, collectively exhaustive alternatives. But, recent empirical studies of market outlet choices assume that farmers consider a set (or bundle) of possible outlets and choose the particular marketing outlet that maximizes expected utility (Takele et al, 2017;Kassa et al (2017;Mekonin, 2017;Addisu, 2018).…”