Rural Household’s Risk Attitude and Credit Rationing: The Case of Chongqing in China


This paper identifies farmers’ risk attitude through ELCE method and problem design that conducts a survey of 237 rural households in Chongqing Municipality, and empirically studies the relationship between risk attitudes and credit rationing by utilizing Probit and Logit model. The results show that farmers’ risk attitude and credit rationing are a significant positive correlation. The stronger farmers’ risk aversion is, the more serious the demanded credit rationing becomes. Risk attitude which is determined the risk cost and risk premium, thus affects the credit behavior and credit rationing degree. In addition, distance of peasant’s residence away from the city and their land amount have a positive significant influence on credit rationing, while the factors, such as farmers’ education level, income, family labor force, have a negative significant effect on credit rationing. Based on these findings, the paper further analyzes the relationship between farmers’ credit using and credit rationing to farmers with different risk attitudes. Measures to relieve the farmer’s credit rationing must be taken from government, financial institutions and farmers respectively.

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Pang, X. , Kuang, Y. and Gong, X. (2014) Rural Household’s Risk Attitude and Credit Rationing: The Case of Chongqing in China. American Journal of Industrial and Business Management, 4, 728-738. doi: 10.4236/ajibm.2014.412079.

Conflicts of Interest

The authors declare no conflicts of interest.


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