The Economic Impact of Farm Credit:An Empirical Investigation based on IVQR Model

This paper empirically estimates the economic impact of farm credit by IVQR method,which takes both heterogeneous effect and endogenous problem into account,using a survey data of 3,000 households from rural China in 2003.Our results show that credit contributes to farmers' operation income significantly on the whole,but its impact exists heterogeneous on the distribution of income.The credit impact is not significant for the poorest and richest farmers,but benefits the middle and low income farmers,while the output elasticity is about 0.08.Since the rural credit allocation leans to rich farmers in China,this provides evidence for credit constraints faced by the middle and low income farmers.The estimators got by 2SLS and QR both exist apparent biases.