Article thumbnail

The Determinants of Polish Farmers' Credit Interest Rates: Hedonic Price Analysis and Implications for Government Policy

By Martin Petrick and Laure Latruffe


Our micro-econometric analysis of agricultural credit market outcomes in Poland sheds new light on the relationship between contractual arrangements and interest rates. An innovative theoretical framework based on a hedonic market model is developed. We interpret the factors that influence interest rates as "quality" components of the credit contract. We use unique data including detailed information about Polish farmers' credit contracts. Both nominal interest rates and bank fees are considered. Results show that banks prefer liquid types of collateral, and care little about the loan's purpose. The effect of government subsidies on interest rates is small compared to the officially declared reduction of the nominal rate.agricultural finance, credit policy, hedonic regression, micro-econometrics, Poland, Agricultural and Food Policy, Financial Economics, Q12, Q14, P32,

OAI identifier:
Downloaded from

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.

Suggested articles


  1. (2004). A Microeconometric Analysis of Credit Rationing in the Polish Farm Sector.
  2. (2004). Agricultural credit market in Poland – Experiences in the market economy.
  3. (1999). Agricultural Credit Problems and Policies During the Transition to a Market Economy in Central and Eastern Europe.
  4. (2001). Agricultural finance: credit, credit constraints, and consequences. In
  5. (2000). Agricultural Policies in OECD Countries. Monitoring and Evaluation
  6. (2004). Commercial Bank Lending to SMEs in Poland.
  7. (2001). Competitiveness and Farm Incomes in the CEEC Agri-Food Sectors: Implications before and after Accession for EU Markets and Policies. Volumes I and II. Brussels: European Commission, Directorate General for Agriculture.
  8. (1995). Contemporary Financial Intermediation. Fort Worth:
  9. (1990). Credit rationing.
  10. (1978). Credit Rationing. Issues and Questions.
  11. (2001). Documentation of the Poland Farm Survey
  12. (2005). Empirical Measurement of Credit Rationing in Agriculture: A Methodological Survey.
  13. (1991). Finance at the Frontier. Debt Capacity and the Role of Credit in the Private Economy. Washington D.C.:
  14. (2005). Functioning of the Rural Credit Market in Poland: Case Studies of Farmers and Banks.
  15. (1999). Hedonic models.
  16. (1974). Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition.
  17. (2004). Investment and Financial Constraints of Polish Farmers. Working Paper No. 04-01, INRA - Unité ESR Rennes.
  18. (1999). Kredit- und Finanzmärkte im Rahmen des Transformationsprozesses des Agrarsektors
  19. (1989). Land as a Differentiated Factor of Production: A Hedonic Model and Its Implications for Welfare Measurement.
  20. (1997). Microeconomics of Banking.
  21. (2000). Ministerstwo Rolnictwa i Rozwoju Wsi.
  22. (1992). Optimal Financial Contracts.
  23. (2000). Stereotypes in the European Union concerning Polish Agriculture. Warsaw: Agricultural Policy Analysis Unit / Foundation Programmes for Agriculture.
  24. (1976). The Borrower-Lender Relationship, Competitive Equilibrium, and the Theory of Hedonic Prices.
  25. (1986). The Economics of Institutions and the Sources of Growth.
  26. (1997). Transaction Costs in Mexico's Preferential Credit.