The impact of access to credit on the economic well-being of agricultural households in eastern India is empirically evaluated. Using a large, farm-level data set from eastern Indian states and a multinomial endogenous switching regression model, the findings reveal that access to credit increases economic well-being, and farmers availing credit from formal sources are better off than those availing credit from informal sources. Finally, access to credit affects recipients heterogeneously, implying that credit policies should be adaptable to different agricultural household groups.
