1.PrologueThankyou,Mr.Chairman,foryourgraciousintroduction.Iamhonoredtohavethechancetoaddressyouonthisspecialoccasion.Thetopicofmypaperis“TransactionCostandFarmers’ChoiceofAgriculturalProductsSelling”.Theoutlineofmytalkasfollows.ThefirstpartIwanttointroducethebackgroundofthisresearch.Thesecondpartsuggestsasimplehouseholdchoicemodel.Thethirdpartcoversthedatausedinthisresearch.Andthen,weintroducetheempiricalresults.Finally,asimpleconclusionisgiven.2.IntroductionWell,let’smoveonthefirstpartofthistopic.Themotivationofthisworklikethis.Institutionaleconomicspositsthatagentsmakingdecisionsondifferenttypesoftransactionsdosoinacostlyway.Forexample,farmersdecidingsellaparticularcroptowhombasetheirdecisionsnotonlyonthepricetheyexpecttoreceiveineachmarketchoicebutalsoonadditionalcostsrelatedtotransactinginthesemarkets.Iwanttouseapicturetoillustrateit.Forexample,givensomemarketchannels,farmers’choicescanberegardedasequilibriumbetweenthesurplusandtheadditionalcoststhatrelatedtotransacting.Especiallyindevelopingcountries,high-valuecropproducersfullyparticipateinthemarketandthetransactioncosthasbeenthehardconstrainttofarmers.Furthermore,Farmers’marketchoicescanbetakenasachoicedilemmaoftransactioncostandproductionsurplus.Consequently,thescientificquestionofthisresearchishowtransactioncostaffectsplanters’choices.3.MethodologyLet’smovetothetheoreticalmodelofourresearch.Considerahouseholdmodelinonerotation.Instage1,famerηneedstoallocatetheinputfactors.Thisprocesscanbesetintoafunctionlikethis,Qηmeanstheoutputfarmersdecidetoproduce.pimpliestheOutputpriceWimpliesInputPriceand.:isfixedinput.Onceproducewhatandproducehowmanyaredecided,nextquestiontobeconsideredishowmuchproductstobetransactedinmarket.Hereweusethreefunctionstodescribethisquestion.Thefirstequation,Cηmeanshowmuchagriculturalproductsusedbyfamersthemselves.pimpliesthepricetheagriculturalproduct,suggeststhefluctuationofCη.Thesecondequation,qηmeanstheamountofagriculturalproductstransactedinmarket.Thethirdequationimpliestheamountexchangedinnthtime.InStage3,farmerswilldecidetoselltheproductstowhom.Chanelj’smarketpriceisdecidedbyanexogenesispriceandfarmers’negotiatingpower.Besidesthis,weuseamatrixtoshowthenetprofitofChanelj,andthenfarmers’choicecanbeexpressedinatypicalchoicemodelBasedonthechoicemodel,anotherimportantconceptisfamers’channelchoice.Here,wesetfivetypes.Theyrankbythemarketbarriers.Accordingly,wesetagroupdiscretenumbertoexpressthem.Y:dependentvariableY=5,meansfarmerchoose),,(zqwpQQzq),(zcpcccQqnqqizc),(*zbiijijqBppikikikX11ijijiki)Xexp()Xexp()X|jjPr(kbrokers.Y=1,farmerssellproductstoconsumersdirectly.4.DataandestimationproceduresHere,weillustratethedatadistributionwiththismap.AccordingtotheAgriculturalregionalizationfromDepartmentofAgriculture,TheapplespecializationareasinChinacontaintwoparts:BoSeaareaandLoessPlateau.BoSeaAreainredcolor,containsHebei,ShandongandLiaoning3provinces.AndLoessPlateauingreencolor,containsShanxi,Henan,ShaanxiandGansu4provinces.Firstly,weusePPSmethodtogetthefirststagesamplingunit14countiesin7provinces.Thenuserandomsamplemethodtogetvillageandhousehold.Theyareoursampledistribution.5.EmpiricalResults6.Conclusions