Investigating Effects of Formal and Informal Financial Access on Willingness to Staying in the Village

Document Type : Original Article

Authors

1 PhD Student in Agricultural Economics, Ferdowsi University of Mashhad, Iran.

2 Corresponding Author and Professor of Agricultural Economics Department, Ferdowsi University of Mashhad, Iran

3 Associate Professor of Agricultural Economics Department, Ferdowsi University of Mashhad, Iran.

Abstract

Today, in developing countries, including Iran, migration from rural to urban areas is an important social and economic issue. Given the importance of the issue of willingness to stay in village, this study aimed at investigating the relationship between willingness to stay in village and effects of financial access through internal and external financing. The statistical population included the rural households of Gonabad, Torbat-e Heydarieh and Sabzevar counties in Razavi Khroasan province of Iran; and among them, 397 rural households were selected as the sample size. The extent of people's satisfaction with living in rural areas as dependent variable (low, medium and high satisfaction) and age, gender, type of activity, area under cultivation, income, and total value of assets, savings and access to formal and informal credits as independent variables were studied. To analyze the data, due to the existence of heterogeneity in the sample, the multilevel sequential logit method was used. To confirm the existence of heterogeneity in the studied cities and villages, the statistics of intra-class correlation coefficient (ICC) and design effect (DE) index were considered, resulting in 0.25 and 0.48 values, respectively. Since these values were more than 0.2, the effects of intra-unit autocorrelation were evaluated as considerable and the existence of heterogeneity in the studied cities and villages was accepted; in other words, at the city level, the two main parameters of the number of banks in relation to the urban population and the urban wage rate showed about 0.25 variances between cities, and at the village level, the intra-unit auto-correlation of 0.48 indicated that the main variables of unemployment rate, the presence or absence of water resources and the average income level of the people included about 0.48 variance between villages, which these heterogeneity would provide a wide range of satisfaction to a large extent. Also, other research findings showed that granting facilities to rural households formally (rather than informally) could increase their motivation to stay in the village, and with these formal facilities, they would be able to start their own businesses in rural areas; hence, they might have more satisfaction and desire to stay in the countryside and not migrate to the city.

Keywords

References

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