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1.1.1 Binary Logit Model
Following Madalla (1983, 2001), the probability, p, that a
small scale milk farmer adopts the chilling hub model is
given by a Logit model;
Z= latent variable that takes values of 1 if a farmer adopts
and uses the chilli
particular, for the household/farmer engaged in the milk
cooling plants, we cannot assess the worth of the observed
outcome without some information on the counterfactual
i.e. what the household/farmer would have experienced
had it not engaged in the cool
1. ILRI, Informal Traders Lock Horns with the
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Smallholder Milk Producers in Kenya.
3. IMF, World Economic and Financial
Farmer i's profitability without the cooling plant (Ii = 0) is
y0i = 0 X0i + 0i;
In the model, Zi is a vector of farm characteristics that
affect farmers decisions to join the cooling plant; X1i and
X0i are two vectors of farm characteristics that affect
practices. Livestock Production Science 82 (2003)
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2002. The Use of Propensity Score Matching in
yc1_0i = E (y1i | Ii = 0, x0i) = x0i1 - 11 (Zi) / [1 - F(Zi)]
xb1i represents the unconditional expectation of farmers
performance under the cooling plant;
xb0i represents the unconditional expectation of farmers
performance without the cooling plant;
Are you a member/shareholder of any other
private farmer cooling plant?
Are you delivering milk and other crops to the
private farmer cooling plant? 1= Yes
Are there any other benefits from the cooling
1. Peruvian Andes. Economic Development and
Cultural Change 52 (1): 12958.
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Propensity Score. Working Paper 969, Economic
Growth Center, Yale University, New Ha
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indigenous farmers and the contest for land in
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