The Impact Of Credit Constraints On The Welfare Of Farmers

According to Liquidity constraint theory,the borrowing rate is usually higher than the savings rate,consumers can’t borrow at the same rate,they are constrained by liquidity,the temporary income of consumers has been affected,and because consumption is "overly sensitive" to income,consumer’s spending is positively correlated with expected disposable income,thus,consumers cannot allocate their consumption expenditure to the maximum effect in the life cycle.More and more scholars study consumer’s behavior from the perspective of credit constraints to explore the relationship among credit constraint,income and consumption.Developing countries have a more serious dual economic structure,and become the main research target of scholars.In these countries,the unbalanced distribution of resources has long existed and the phenomenon of credit constraint is more common.Existing research shows that efficient rural financial market can allocate resources reasonably and effectively,which can not only improve the welfare level of farmers’income and consumption,but also balance the development gap between urban and rural areas,Promote the development of rural economic and social development.Therefore,this paper is based on rural micro research data to analyze the influence of credit constraints on income and consumption under different channels and purposes.The data of this paper comes from the investigation of the research group of "Jiangsu rural financial development report",this paper classify the credit needs of farmers according to the borrowing channel and purposes.Credit constraints are divided into formal productive credit constraints,formal consumer credit constraints,informal productive credit constraints,and informal consumer credit constraints,then construct quantile regression model to empirically test the impact of credit constraints on rural household income and non-basic consumption in different welfare levels.In this paper,STATA12 is used to analyze the data,and the results are basically consistent with the research hypothesis.The main conclusions of this paper are:formal productive credit constraints have a more significant negative impact on the net income of families which have higher income levels,and have a sigtificant negative impact on the non-basic consumption of families which have higher consumption levels;formal consumer credit constraints have a more significant negative impact on the net income of families which have middle or higher income levels,while have no significant influence on the non-basic consumption of farmers;Informal productive credit constraints have a more significant negative impact on the net income of families which have lower income levels,while have no significant influence on the non-basic consumption of families;informal consumer credit constraints have no significant influence on the net income of families,but have a more significant negative impact on the non-basic consumption of families which have middle or higher consumption levels.