Factors That Influence the Commitment of Members to Their Cooperative Organization

Abstract

This research explores the factors that influence the commitment of members to their cooperative organization. Previous empirical and theoretical research is reviewed. The cooperative members' decisions regarding patronage are then described in terms of a random utility model. Logit analysis, with data from member surveys of a large grain marketing cooperative. indicates that the factors that influence member patronage are: the ability to share in profits through dividends. The ability to purchase chemicals and fertilizers at the grain elevator, and the percentage of the total farm income obtained from grain operations. There is some evidence that farmers' patronage is positively associated with competitive grain pricing and negatively associated with the firm being active in the community. Additional analysis reveals that the age of the farmer significantly affects the importance the member places on the ability to share in profits through dividends.

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