Intertemporal Choice and Income Regularity: Non-Fungibility in the Timing of Income Among Kenyan Farmers

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dc.creatorInternational Food Policy Research Institute
dc.creatorTinbergen Institute, Vrije Universiteit Amsterdam
dc.date2021
dc.date2024-06-04T09:44:10Z
dc.date2024-06-04T09:44:10Z
dc.date.accessioned2026-06-27T15:10:11Z
dc.descriptionThe optimal design of informal contracts in agricultural value chains depends on when farmers prefer to be paid for their output. While the evidence from the time preference experiments suggests a preference for early payments, ?eld studies often indicate that farmers will defer regular payments if given the opportunity. In this study, we explicitly test whether farmers are more patient regarding regular, earned income than regarding experimental windfall payments. We asked farmers in a dairy cooperative in Kenya to allocate both their milk income and a one-time gift between an early and a deferred payment date. We ?nd that a large majority of participants deferred their milk payments, while rarely choosing to defer the gift. Participants? survey responses suggest that we observe this di?erence because of mental accounting: participants earmarked their regular milk payments, but not the gift, to save for bulky expenditures. We conclude that deferred payments can provide value to producers by functioning as a savings device, even when decisions over windfall income suggest a preference for early payments. We are sharing the data collected through this experiment as well as our do-files for replication and further analysis purposes.
dc.identifierhttps://hdl.handle.net/10568/144423
dc.identifier.urihttp://hdl.handle.net/123456789/96593
dc.languageen
dc.publisherInternational Food Policy Research Institute
dc.relationhttps://doi.org/10.1080/00220388.2019.1632436
dc.relationhttps://hdl.handle.net/10568/147901
dc.rightsOpen Access
dc.sourceInternational Food Policy Research Institute; Tinbergen Institute, Vrije Universiteit Amsterdam. 2021. Intertemporal Choice and Income Regularity: Non-Fungibility in the Timing of Income Among Kenyan Farmers. Washington, DC: International Food Policy Research Institute. https://doi.org/10.7910/DVN/0KKKUS. Harvard Dataverse. Version 1.
dc.subjectvalue chains
dc.subjectincome
dc.subjectsupply chains
dc.subjectfield experimentation
dc.subjectmarketing
dc.subjectmarkets
dc.subjectdairying
dc.titleIntertemporal Choice and Income Regularity: Non-Fungibility in the Timing of Income Among Kenyan Farmers
dc.typeDataset

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Instituto Internacional de Investigación sobre Políticas Alimentarias (IFPRI)