does access to external finance improve productivity evidence from a natural experiment abstract we study the relation between access to finance and productivity our contribution to the literature is a clean identification of a causal effect of access to finance on productivity specifically we exploit an exogenous shift in demand for a product to expose how producers adapt their productivity in the presence of varying levels of access to finance we use a triple differences testing approach and find that production increases the most over the sample period in areas with relatively strong access to finance even in comparison with a control group this result is statistically significant and robust to a variety of controls alternative variables and tests the causal effect of access to finance on productivity that we find speaks to the larger role of finance in economic growth

china s collectivisation puzzle a new resolution according to total factor productivity trends in chinese agriculture china achieved productivity gains both when collectivising 1954 58 and when decollectivising 1979 84 its agriculture if the productivity gains from decollectivisation were due mainly to eliminating the incentive problems of collective farms how the initial collectivisation could also have been associated with gains in productivity presents a major historical puzzle we suggest as an answer the possibility that agricultural production in china was widely organised on a household basis until 1958 despite the collectivisation of property rights and that the formation of the agricultural producers co operatives reduced the inefficiencies in factor allocation that existed following china s land reform

incentives and moral hazard plot level productivity of factory operated and outgrower operated sugarcane production in ethiopia we investigate the unique contractual arrangement between a large ethiopian sugar factory and its adjacent outgrower associations the only significant difference between the sugarcane production on the factory operated sugarcane plantation and on the outgrower operated plots is the remuneration system and thus the incentives to the workers we compare the productivity of the factory operated plantation with the outgrower operated plots based on a new cross sectional plot level data set that includes all plots that are operated by the sugar factory and its adjacent outgrower associations as sugar cane production depends on various exogenous factors that are measured as categorical variables e g soil type cane variety etc we estimate the production function by a nonparametric kernel regression method that takes into account both continuous and categorical explanatory variables without assuming a functional form and without imposing restrictions on interactions between the explanatory variables in order to obtain meaningful productivity measures we impose monotonicity in input quantities using the constrained weighted bootstrapping cwb method our results show that outgrower operated plots have ceteris paribus a statistically and economically significantly higher productivity than factory operated plots which can be explained by outgrowers having stronger incentives to put more effort into their work than the employees of the sugar factory

the inverse relationship between size of land holdings and agricultural productivity the important relationship between the size of land holdings and agricultural productivity in developing countries has been debated intensely from early soviet debates to the extensive literature generated by the release of farm management survey fms data in india the question of returns to scale and input productivities primarily for land in traditional agriculture has been confused and clouded by strong positions and ideological predilections bhagawati and chakravarty saini 1969 and bharadwaj provide extensive bibliographies on the theoretical and empirical aspects of this problem in the indian context briefly sen 1964 1966 mazumdar 1963 1965 c h h rao 1966 1970 khusro saini 1971 bhattacharya and saini more or less endorse an inverse relationship between the land size and its productivity a p rao 1963 and rudra and bandhopadhyay do not believe in the existence of an inverse relationship and argue that no systematic relationship can be established between any two variables describing land size and productivity bharadwaj and others dismiss the statistical validity of an inverse relationship but generally accept it as a stylized fact the approach used in these statistical studies is to employ aggregate average or farm level data within a village or among different villages for all crops or a few specific ones various concepts of productivity and input variables are used the actual regressions use linear or log linear functional forms using the pooled fms data for several states in south india this paper makes an attempt to reexamine in a more general way the relationship between the size of land holdings and agricultural productivity this study employs the transcendental logarithmic translog function to formalize the relation between output and an arbitrary number of inputs the translog function is not locally constrained by assumptions of homogeneity or additivity estimates of output elasticity with respect to land size for various values of cooperating inputs will indicate whether the alleged inverse relationship holds in any or all circumstances

subsidy or market reform rethinking china s farm consolidation strategy chinese food security policy is anchored increasingly on the conviction that domestic grain production should be greatly enhanced and the best way to do so is to expand farm production scale to that end an increasing stream of public investment has been directed to the grain sector in the form for example of farm expansion subsidies our purpose is to assess the potential impacts of china s farm scale expansion on both yields and per hectare economic returns analysis of a large sample of farm household production data finds with some exceptions that grain yields likely will decline as farm size grows compromising food self sufficiency targets more importantly in only isolated cases would per hectare economic returns decline with size thus an emphasis on reducing farmland transactions costs may stimulate cropland consolidation and achieve the desired long term structural transformation

modelling weather effects for impact analysis of residential time of use electricity pricing abstract analyzing the impact of pricing policies such as time of use tou is challenging in the presence of confounding factors such as weather motivated by a lack of consensus and model selection details in prior work we present a methodology for modelling the effect of weather on residential electricity demand the best model is selected according to explanatory power out of sample prediction accuracy goodness of fit and interpretability we then evaluate the effect of mandatory tou pricing in a local distribution company in southwestern ontario canada we use a smart meter dataset of over 20 000 households which is particularly suited to our analysis it contains data from the summer before and after the implementation of tou pricing in november 2011 and all customers transitioned from tiered rates to tou rates at the same time we find that during the summer rate season tou pricing results in electricity conservation across all price periods the average demand change during on peak and mid peak periods is 2 6 and 2 4 respectively changes during off peak periods are not statistically significant these tou pricing effects are less pronounced compared to previous studies underscoring the need for clear reproducible impact analyses which include full details about the model selection process

uptake and usage of cost reflective electricity pricing insights from psychology and behavioural economics abstract the australian electricity industry like many other countries globally is currently facing the complex challenge of reforming electricity tariffs momentum is growing for transitioning residential consumers toward more cost reflective pricing that better reflects the true costs of generation and supply and sends a price signal that presumably incentivises reduced consumption during peak periods under such tariffs customers pay more for electricity used during times of peak demand unlike traditional flat rate tariffs where the price remains stable regardless of time or demand pilot trials indicate that cost reflective tariffs might succeed in reducing peak demand but often only for a small minority of customers such that population wide demand response is minimal or insignificant in this paper we apply insights from psychology and behavioural economics to identify how cost reflective pricing can be designed depicted and delivered to enhance customer uptake and optimal usage thereby facilitating appropriate demand response for a larger cross section of the population by carefully considering the likely impact of relevant cognitive biases and psychological factors which routinely shape human decision making and behaviour we are able to propose practical strategies that industry can adopt to maximise the prospect of cost reflective pricing achieving significant population level peak demand reductions while providing shared benefits for customers retailers networks and regulators alike

land reforms poverty reduction and economic growth evidence from india recognition of the importance of institutions that provide security of property rights and relatively equal access to economic resources to a broad cross section of society has renewed interest in the potential of asset redistribution including land reforms empirical analysis of the impact of such policies is however scant and often contradictory this paper uses panel household data from india together with state level variation in the implementation of land reform to address some of the deficiencies of earlier studies the results suggest that land reform had a significant and positive impact on income growth and accumulation of human and physical capital the paper draws policy implications especially from the fact that the observed impact of land reform seems to have declined over time

the if how and where of assessing sustainable resource use in today s economies those who sustain the burden of resource use those using resources and those providing resources are not necessarily identical with this separation come three fundamental but interrelated decision making perspectives on the sustainability assessment of resource use these three perspectives correspond to the three assessment questions if how and where resources should be used most sustainability assessment approaches do not make their underlying assessment perspectives explicit the goal of this paper is to provide structure and organisation to existing approaches this structuring suggests that any discussion on the appropriateness and validity of different assessment approaches and their results must take into account the underlying assessment perspective the three questions if how and where resources should be used correspond to the requirements of a sustainable resource use while existing assessments do address the three questions in isolation it is all the more important that the limitations and implications of focusing on a single perspective are spelled out as the main contribution the paper distinguishes the rationale of each assessment perspective and develops on their interlinkages and thus provides the context and structure for a more informed and fruitful debate on the assessment of sustainable resource use

the welfare effects of environmental taxation on a green market where consumers emit a pollutant this paper examines the welfare impact of emission taxes and subsidies in a green market where consumers emit a pollutant through their usage of products produced by duopolists for this purpose we employ a discrete continuous model including both consumer choice and usage of an environmentally differentiated product in a utility consistent framework the findings indicate that an emission tax is always welfare dominant over a subsidy on consumer purchases of the clean product because of its contribution to a reduction in environmental damage it does this by both inducing firms to improve the environmental qualities of their products and by constraining consumer usage of these products

optional time of use prices for electricity econometric analysis of surplus and pareto impacts we estimate a model of time of use tou consumption and choice among optional tou tariffs in which the customer s choice among tariffs is based on its demand parameters which vary in the population we simulate the impact on consumption consumer surplus and profit of several optional tou rates that were offered experimentally in northern california the analysis suggests that with one possible exception the offering of these optional rates did not constitute a pareto improvement however total surplus excluding measurement costs is estimated to have risen by 1 41 to 2 55 per month per customer who chose the tou rates

agrarian structure and agricultural practice typology and application to western sudan a typology of models that explain patterns of variation in farm endowments and farm practices and yields shows that insecurity in renting land financing constraints and the absence of insurance generate patterns of factor use quite different from the famous inverse relationship caused by labor supervision problems one might expect to observe positive relationships between wealth and yields village level data from western sudan confirm that such positive relationships are not a theoretical curiosity wealthy farmers have higher levels of output per hectare because they use more labor per hectare insurance and financing constraints appear to be the crucial market failures

missing ness in action selectivity bias in gps based land area measurements land area is a fundamental component of agricultural statistics and of analyses undertaken by agricultural economists while household surveys in developing countries have traditionally relied on farmers own potentially error prone land area assessments the availability of affordable and reliable global positioning system gps units has made gps based area measurement a practical alternative nonetheless in an attempt to reduce costs keep interview durations within reasonable limits and avoid the difficulty of asking respondents to accompany interviewers to distant plots survey implementing agencies typically require interviewers to record gps based area measurements only for plots within a given radius of dwelling locations it is therefore common for as much as a third of the sample plots not to be measured and research has not shed light on the possible selection bias in analyses relying on partial data due to gaps in gps based area measures this paper explores the patterns of missingness in gps based plot areas and investigates their implications for land productivity estimates and the inverse scale land productivity relationship using multiple imputation mi to predict missing gps based plot areas in nationally representative survey data from uganda and tanzania the paper highlights the potential of mi in reliably simulating the missing data and confirms the existence of an inverse scale land productivity relationship which is strengthened by using the complete multiply imputed dataset the study demonstrates the usefulness of judiciously reconstructed gps based areas in alleviating concerns over potential measurement error in farmer reported areas and with regards to systematic bias in plot selection for gps based area measurement

too small to be beautiful the farm size and productivity relationship in bangladesh this paper examines the agricultural productivity farm size relationship in the context of bangladesh features of bangladesh s agriculture help overcome several limitations in testing the inverse farm size productivity relationship in other developing country settings a stochastic production frontier model is applied using data from three rounds of a household panel survey to estimate simultaneously the production frontier and the technical inefficiency functions the correlated random effects approach is used to control for unobserved heterogeneous household effects methodologically the results suggest that the stochastic production frontier models that ignore the inefficiency function are likely mis specified and may result in misleading conclusions on the farm size productivity relationship empirically the findings confirm that the farm size and productivity relationship is negative but with the inverse relationship diminishing over time total factor productivity growth driven by technical change is found to have been robust across the sample across farm size groups the relatively larger farmers experienced faster technical change which helped them to catch up and narrow the productivity gap with the smaller farmers

access to capital and agrarian production organisation there are two problems both universal that entrepreneurs in any economy must contend with firstly an agent generally has access only to a limited amount of working capital secondly workers hired by an agent are subject to moral hazard and this necessitates their supervision this paper models for an agrarian economy the constraints imposed on entrepreneurs activities by these two problems and endogenously determines the various organisational forms of production as well as the allocation of resources that will obtain with a simple model we endeavour to explain a diverse set of empirical observations pertaining to the less developed countries in terms of the general processes that determine the distribution of income among the various agents and the hierarchical relationships that develop among them agricultural production typically involves a period of several months between the time the inputs are purchased and the time the output is marketed access to working capital and hence to the credit market thus plays an important role in a farmer s production decisions the distribution of access to credit in turn tends to be an important determinant of income distribution in poor agrarian economies credit is invariably rationed according to the ability to offer collateral the amount of working capital a farmer can mobilise therefore depends on the amount of land he owns which is often a good proxy for his overall wealth and thus his ability to offer collateral further since hired hands have a propensity to shirk they need to be supervised and therefore the

impacts of prices and transactions costs on input usage in a liberalizing economy evidence from tanzanian coffee growers despite improvements in production incentives agricultural output in africa remained sluggish through the 1990s low use of purchased inputs may be part of the cause of persistently low productivity in african agriculture this article analyzes the roles of relative prices and transactions costs in explaining low use of chemical inputs among tanzanian coffee growers a sample selection model indicates that output prices exert great influence on input purchases and that both fixed and variable transactions costs affect input use decisions travel costs in input and output markets have distinct effects on input usage implying distinct avenues for interventions to promote more intensive use of agricultural inputs

applications of option pricing theory twenty five years later nobel lecture to the memory of alfred nobel december 9 1997 this abstract was borrowed from another version of this item

can unobserved heterogeneity in farmer ability explain the inverse relationship between farm size and productivity abstract the well known inverse relationship between farm size and productivity is usually explained in terms of diminishing returns with respect to land and other inputs coupled with various types of market frictions that prevent the efficient allocation of land across farms we show that even in the absence of diminishing returns one can provide an alternative explanation for this phenomenon using endogenous occupational choice and heterogeneity with respect to farming skills

agricultural transformation in africa assessing the evidence in ethiopia summary despite significant efforts africa has struggled to imitate the rapid agricultural growth that took place in asia in the 1960s and 1970s as a rare but important exception ethiopia s agriculture sector recorded remarkable rapid growth during 2004 14 this paper explores this rapid change in the agriculture sector of this important country the second most populous in africa we review the evidence on agricultural growth and decompose the contributions of modern inputs to growth using an adjusted solow decomposition model we also highlight the key pathways ethiopia followed to achieve its agricultural growth we find that land and labor use expanded significantly and total factor productivity grew by about 2 3 per year over the study period moreover modern input use more than doubled explaining some of this growth the expansion in modern input use appears to have been driven by high government expenditures on the agriculture sector including agricultural extension but also by an improved road network higher rural education levels and favorable international and local price incentives

wealth weather risk and the composition and profitability of agricultural investments despite the growing evidence that farmers in low income environments are risk averse there has been little empirical evidence on the importance of risk in shaping the actual allocation of production resources among farmers differentiated by wealth the authors use panel data on investments in rural india to examine how the composition of productive and nonproductive asset holdings varies across farmers with different levels of total wealth and across farmers facing different degrees of weather risk income variability is a prominent feature of the experience of rural agents in low income countries the authors report evidence based on measures of rainfall variability that the agricultural investment portfolio behavior of farmers in such settings reflects risk aversion due evidently to limitations on consumption soothing mechanisms such as crop insurance or credit markets the authors results suggest that uninsured weather risk is a significant cause of lower efficiency and lower average incomes a one standard deviation decrease in weather risk measured by the standard deviation of the timing of the rainy season would raise average profits by up to 35 percent among farmers in the lowest wealth quartile moreover rainfall variability induces a more unequal distribution of average incomes for a given distribution of wealth wealthier farmers are willing to absorb significant risk without giving up profits to reduce production risk smaller farmers have to invest their limited wealth in ways that reduce their exposure to risk at the cost of lower profit rates the authors found that at high levels of rainfall variability differences in rates of profit per unit of agricultural assets were similar across classes of wealth but over the sample range of rainfall variability these rates of profit were always higher for the poorer farmers than for the wealthier ones suggesting that the disadvantages of small farmers in risk diffusion are more than offset by their labor cost advantage

measuring farm sustainability and explaining differences in sustainable efficiency abstract a major objective of european agricultural policy is to have a sustainable and efficient farming sector that is applying environmentally friendly production methods policy makers aim to combine a strong economic performance and a sustainable use of natural resources therefore it is important to measure and to assess farm sustainability for a large dataset of flemish dairy farms a valuation method that is based on the concept of opportunity costs is used to calculate and analyze differences among the sample farms with respect to the creation of sustainable value but more important than measuring the creation of sustainable value is to analyze differences in sustainable efficiency therefore sustainable efficiency measures are calculated and differences in sustainable efficiency are explained using panel data an effect model captures the determinants of sustainable efficiency of the studied farms the empirical model shows that in general larger farms have a higher sustainable efficiency also farmer s age and dependency on support payments proved to be determining characteristics for observed differences in sustainable efficiency

optimal tariff design under consumer self selection abstract this paper considers the design of electricity tariffs to guide an individual consumer to select the tariff designed for his her consumption pattern in our model the utility maximizes the weighted sum of individual consumers benefits of electricity consumption subject to the utility s revenue requirement constraints the consumers free choice of tariffs is ensured with the so called self selection constraints we analyze the relationship between the consumers optimal choice of tariffs and the weights in the aggregated consumers benefit function if such weights exist then they will guarantee the consumers optimal choice of tariffs and the efficient consumption patterns we also analyze the welfare effects by using demand parameters estimated from a finnish dynamic pricing experiment the results indicate that it is possible to design an efficient tariff menu with the welfare losses caused by the self selection constraints being small compared with the costs created when some consumers choose tariffs other than those assigned for them

voluntary electricity conservation of households after the great east japan earthquake a stated preference analysis abstract this paper examines the voluntary electricity saving awareness of households after the great east japan earthquake and the subsequent accident at the fukushima nuclear power station we conduct a conjoint analysis of consumer stated preferences for the settings of air conditioners refrigerators and the standby power of electrical appliances based on a web questionnaire survey administered in the areas supplied by the tokyo electric power company tepco and kansai electric power company kepco the main findings of this paper are as follows first we observe awareness of voluntary electricity conservation among the households in both the tepco and kepco areas after the disasters second awareness of voluntary power saving is higher in the tepco area which has been directly affected by the electric power shortages in comparison with the kepco area where there was no such direct impact third if power prices are to be further raised the consumer responses to the price changes would be small in both areas furthermore we show that the potential voluntary reduction in electric power consumption of a household in the tepco area is 26 more than that in the kepco area during the summer peak periods

towards indicators of sustainable development for firms a productive efficiency perspective sustainable development can be reflected by various economic social and environmental factors that are closely interconnected with each other and with the additional dimension of time which stresses the long term perspective of several factors due to their central role in human activities and development firms should play an important part in the attainment of sustainability goals the purpose of this paper is to contribute to the methodology of indicators that allow for the assessment of business participation into sustainable development a fundamental standpoint adopted is to view economic social and environmental efficiency as a necessary but not sufficient step towards sustainability to work out indicators we build on both the concepts of cost benefit analysis and the principles of productive efficiency we assume that we have observations on economic social and environmental factors for a set of decision making units dmus e g firms in an industrial sub sector the efficiency of each dmu is computed from a set of observed data using mathematical programming techniques resulting in dmus that are efficient and define the efficiency frontier among the set of dmus and dmus that are inefficient to cope with the multidimensionality of sustainable development it is important not to base decisions on one unique aggregate sustainability indicator instead it is suggested to develop two or three partial indicators that stress different aspects of the problem the proposed indicators could be used as an aid to detect so called factors of unsustainability and hence to provide for recommendations as to the regulations and incentives or managerial practices that will contribute to overall sustainability c 1999 elsevier science b v all rights reserved

econometric estimation of technical and environmental efficiency an application to dutch dairy farms in this article we estimate the technical and environmental efficiency of a panel of dutch dairy farms nitrogen surplus arising from the application of excessive amounts of manure and chemical fertilizer is treated as an environmentally detrimental input a stochastic translog production frontier is specified to estimate the output oriented technical efficiency environmental efficiency is estimated as the input oriented technical efficiency of a single input the nitrogen surplus of each farm the mean output oriented technical efficiency is rather high 0 894 but the mean input oriented environmental efficiency is only 0 441 intensive dairy farms are both technically and environmentally more efficient than extensive farms

should african rural development strategies depend on smallholder farms an exploration of the inverse productivity hypothesis in africa most development strategies include efforts to improve the productivity of staple crops grown on smallholder farms an underlying premise is that small farms are productive in the african context and that smallholders do not forgo economies of scale a premise supported by the often observed phenomenon that staple cereal yields decline as the scale of production increases this paper explores a research design conundrum that encourages researchers who study the relationship between productivity and scale to use surveys with a narrow geographic reach when policy would be better served with studies based on wide and heterogeneous settings using a model of endogenous technology choice the authors explore the relationship between maize yields and scale using alternative data since rich descriptions of the decision environments that farmers face are needed to identify the applied technologies that generate the data improvements in the location specificity of the data should reduce the likelihood of identification errors and biased estimates however the analysis finds that the inverse productivity hypothesis holds up well across a broad platform of data despite obvious shortcomings with some components it also finds surprising consistency in the estimated scale elasticities

the econometrics of nonlinear budget sets traditional empirical analysis of consumer demand has usually made the assumption of linear budget sets that is the consumer is assumed to purchase any desired quantity at a constant price subject to a budget constraint the major exception to this framework is the analysis of demand when some goods are rationed 2 in the rationed case the price is constant up to a quantity limit in contrast to the rationed case here i consider the situation where the price varies with the amount of the good purchased empirical situations with nonconstant prices come readily to mind and of course they have received much recent attention from theorists since mirrlees 44 paper on optimal nonlinear taxation the following examples are meant to give a partial listing of cases when nonlinear budget sets occur i electricity prices many electric utilities engage in declining block pricing that is the marginal price of successive kwh s of electricity decrease at a given number of points determined by total demand thus the budget set is piecewise linear houthakker 36 was the first to propose an approach to this problem taylor 51 analyzes the problem at length and hausman kinnucin and mcfadden 31 use an instrumental variables estimator to provide consistent estimates of the demand function

deconstructing the rosenfeld curve making sense of california s low electricity intensity abstract regulatory regimes that have increased household energy efficiency are of widespread interest to policymakers today a prominent example is the state of california where electricity intensities in the residential sector have stayed near constant since the 1970s in sharp contrast to nationwide trends in the united states a structural model of residential energy consumption is used to show that the use of energy intensities alone to evaluate the success of california efficiency programs is misleading and glosses over important policy independent factors we quantify important effects of price climate conditions and demographic characteristics on energy consumption in california we also provide evidence of split incentive considerations in residential energy consumption patterns we conclude that while state policy may have had some effect on efficiency caution needs to be exercised in using the california example to inform expectations from similar measures in other regions

from policy aims and small farm characteristics to farm science needs this paper examines the agricultural science needs of small farms the green revolution successfully negotiated two tightropes agricultural productivity increases were larger than the fall in prices that resulted from producing more food and output per hectare rose faster than output per worker thus increasing the demand for labor the current challenge is to generate technology that helps poor farmers in low potential areas since research capacity is increasingly private incentives to produce the needed technology are needed perhaps through contracts to produce varieties with specific characteristics development of seeds needs complementary work on water for which economists plant scientists and engineers need to pool their skills

an aggregate resource efficiency perspective on sustainability a sustainable value application to the eu 15 countries the sustainable value approach integrates the efficiency with regard to environmental social and economic resources into a monetary indicator it gained significant popularity as evidenced by diverse applications at the corporate level however its introduction as a measure adhering to the strong sustainability paradigm sparked an ardent debate this study explores its validity as a macroeconomic strong sustainability measure by applying the sustainable value approach to the eu 15 countries concretely we assessed environmental social and economic resources in combination with the gdp for all eu 15 countries from 1995 to 2006 for three benchmark alternatives the results show that several countries manage to adequately delink resource use from gdp growth furthermore the remarkable difference in outcome between the national and eu 15 benchmark indicates a possible inefficiency of the current allocation of national resource ceilings imposed by the european institutions additionally by using an effects model we argue that the service degree of the economy and governmental expenditures on social protection and research and development are important determinants of overall resource efficiency finally we sketch out three necessary conditions to link the sustainable value approach to the strong sustainability paradigm

the sustainable value approach a clarifying and constructive comment recently the original benchmarking methodology of the sustainable value approach became subjected to serious debate while kuosmanen and kuosmanen 2009b critically question its validity introducing productive efficiency theory figge and hahn 2009 put forward that the implementation of productive efficiency theory severely conflicts with the original financial economics perspective of the sustainable value approach we argue that the debate is very confusing because the original sustainable value approach presents two largely incompatible objectives nevertheless we maintain that both ways of benchmarking could provide useful and moreover complementary insights if one intends to present the overall resource efficiency of the firm from the investor s viewpoint we recommend the original benchmarking methodology if one on the other hand aspires to create a prescriptive tool setting up some sort of reallocation scheme we advocate implementation of the productive efficiency theory although the discussion on benchmark application is certainly substantial we should avoid the debate to become accordingly narrowed next to the benchmark concern we see several other challenges considering the development of the sustainable value approach 1 a more systematic resource selection 2 the inclusion of the value chain and 3 additional analyses related to policy in order to increase interpretative power

modeling farm households price responses in the presence of transaction costs and heterogeneity in labor markets we develop a farm household model to analyze price responses of farm households this model incorporates various types of transaction costs as well as labor heterogeneity nonproportional variable transaction costs or labor heterogeneity imply that production and consumption decisions become nonseparable even when the household buys or sells labor an empirical model is estimated using data from midwest poland the results show that nonproportional variable transaction costs and labor heterogeneity significantly influence household behavior not all price elasticities however change significantly if these are neglected

optional time of use pricing can be pareto superior or pareto inferior abstract many public utilities offer a choice between time of use and flat rates two points are established 1 optional tou time of use schedules exist that pareto dominate both mandatory flat and mandatory tou rates but 2 optional tou prices based on marginal costs can be welfare decreasing even pareto inferior

rural wages labor supply and land reform a theoretical and empirical analysis land reform is one of the most mentioned of the theoretical policy instruments discussed in the development literature yet relatively little attention has been paid to the wage rate consequences of such a program despite the fact that perhaps more than one half of rural families in a developing country receive a substantial proportion of their income from wage earnings in agriculture one reason for this lacuna may be that the determination of wages and family labor supply in the agricultural sector of ldcs has also been somewhat neglected particularly in the context of a heterogeneous labor force 2 the subsistence or institutional wage models of w arthur lewis john fei and gustav ranis and gerald rodgers for instance offer no theory of how rural wage levels or differentials are set and thus provide little guidance on how wage rates would be affected by changes in land ownership patterns more recently pranab bardhan and t n srinivasan david newbery and clive bell and pinhas zusman who formulate general equilibrium market or bargaining models determining endogenously the rental share paid by tenant sharecroppers have assumed that agricultural wage rates are exogenous or determined only by nonagricultural factors all of these models assume that rural labor is homogeneous another reason why the potential wage impact of a land reform program may have received little attention is that models of peasant family behavior such as those of a k sen dipak mazumdar and robert mabro typically embody two restrictive assumptions which would tend to make the equalization of landholdings appear wage augmenting although this implication has never been formally derived these assumptions are that 1 agriculture is dualistic with small farm families facing lower shadow prices of labor leisure than large farm landlords because of impediments to labor mobility and 2 agricultural households are dichotomous small farmers employ family labor and maximize utility while large farms only utilize wage labor and maximize profits data from a 1970 71 allindia survey of over 5 000 households collected by the national council of applied economic research3 indicate however that almost all cultivator households large and small participate actively in the labor market as either buyers or sellers of labor services with almost 88 percent of households cultivating a gross cropped area less than 1 5 acres utilizing some hired labor seventynine percent of these small farm households associate professor yale ujniversity the research embodied in this paper was supported in part by a grant from the ford and rockefeller foundations program in support of social science and legal research on population policy and with funds from the u s agency for international development under order no aid otr 1432 helpful suggestions and comments were provided by james l mccabe mark gersovitz an anonymous referee the managing editor and members of the economic growth center yale university i am also grateful to the members of the research program in development studies princeton university for the use of their facilities research assistance was provided by james devine anne morgan and roberta robson inotable exceptions are r albert berry mark gersovitz and m a rahman all of these authors however employ geometric analyses with differing assumptions leading to wholly different predictions regarding wage effects none consider the heterogeneity of agricultural labor pay attention to questions of stability or attempt to apply their models to data 2lnformation on the differential impact of alternative agricultural policies including land reform on sex or age specific wage rates is not only important in settling income distribution and equity issues but as suggested in an article by the author and robert evenson may have significant implications for population growth and schooling as well 3for a more detailed discussion of these data see the author

rural organization and land reform in brazil the role of nonagricultural benefits of landholding abstract this article examines the effects of nonagricultural land use on agrarian organization and land reform in an economy characterized by limited credit and land rental markets the nonagricultural demand for land under credit constraint generates a potential mismatch between the distribution of land and the distribution of farming skills this disparity reduces the agricultural output if the land rental market is absent a perfect land rental market is shown to determine the highest possible agricultural output policy implications from the model include in addition to market improvements the fact that small farmers rather than landless people should be the target of redistributive land reform programs

a model for efficient consumer pricing schemes in electricity markets suppliers in competitive electricity markets regularly respond to prices that change hour by hour or even more frequently but most consumers respond to price changes on a very different time scale i e they observe and respond to changes in price as reflected on their monthly bills in this paper we examine mixed complementarity programming models of equilibrium that can bridge the speed of response gap between suppliers and consumers yet adhere to the principle of marginal cost pricing of electricity we develop a computable equilibrium model to estimate ex ante time of use tou prices for a retail electricity market it is intended that the proposed models would be useful 1 for jurisdictions e g ontario where consumers prices are regulated but suppliers offer into a competitive market 2 for forecasting forward prices in unregulated markets and 3 in evaluation and welfare analysis of the policies regarding regulated tou pricing compared to regulated single pricing

macroeconomic measures of sustainability this paper reviews the policy need for indicators of sustainable development and the impetus behind recent moves to establish official indicators the range of indicators available from current economic theory is then examined these measures may be divided into those based on flows and those based on stocks flow based measures are essentially attempts to adjust net national product to transform it into an indicator of sustainability stock based measures revolve around the concept of the natural and man made capital stocks we also consider the idea of safe minimum standards as a sustainability indicator the paper concludes that no currently available single measure of sustainability is likely to be adequate

shadow wages allocative inefficiency and labor supply in smallholder agriculture this article introduces a method for estimating structural labor supply models in the presence of unobservable wages and deviations of households marginal revenue product of self employed labor from their shadow wage this method is therefore robust to a wide range of assumptions about labor allocation decisions in the presence of uncertainty market frictions locational preferences etc we illustrate the method using data from rice producers in cote d ivoire these data like previous studies reveal significant systematic differences between shadow wages and the marginal revenue product of family farm labor we demonstrate how one can exploit systematic deviations in the present case related to household characteristics such as the land labor endowment ratio to control for both unobservable wages and prospective allocative inefficiency in labor allocation in structural household labor supply estimation

not measuring sustainable value at all a response to kuosmanen and kuosmanen abstract in their article in this issue of ecological economics kuosmanen and kuosmanen kuosmanen t and kuosmanen n this issue how not to measure sustainable value and how one might ecological economics aim to criticise the measurement of sustainable value as proposed in our previous research by adopting a production perspective and based on a productive efficiency analysis they claim that the proposed way of measuring sustainable value represents an invalid simplification that rests on restrictive and unrealistic assumptions our response is to show that their argument rests on a fundamental misspecification of the sustainable value approach we identify three conceptual misfits a mismatch in the perspective of the analysis a misspecification of opportunity costs and the irrelevance of production functions ultimately kuosmanen and kuosmanen s train of thought rests entirely within the realm of productive efficiency analysis whereas sustainable value builds on the foundations of financial economics and consequently adopts a macro rather than a firm perspective it is thus not surprising that the findings of kuosmanen and kuosmanen appear to contradict the sustainable value approach however this is due to their fundamental misspecification of the sustainable value approach as a result rather than providing novel insights into how sustainable value might be measured in a better way they do not measure sustainable value at all

is there a farm size productivity relationship in african agriculture evidence from rwanda whether the negative relationship between farm size and productivity that is confirmed in a large global literature holds in africa is of considerable policy relevance this paper revisits this issue and examines potential causes of the inverse productivity relationship in rwanda where policy makers consider land fragmentation and small farm sizes to be key bottlenecks for the growth of the agricultural sector nationwide plot level data from rwanda point toward a constant returns to scale crop production function and a strong negative relationship between farm size and output per hectare as well as intensity of labor use that is robust across specifications the inverse relationship continues to hold if profits with family labor valued at shadow wages are used but disappears if family labor is rather valued at village level market wage rates these findings imply that in rwanda labor market imperfections rather than other unobserved factors seem to be a key reason for the inverse farm size productivity relationship

behavioural and material determinants of production relations in agriculture in this essay we develop a framework for analysing the major institutions governing the production and exchange of output and the primary factors of production in rural areas the analysis incorporates general considerations of risk and information constraints jointly with the principal material attributes of agriculture and of agricultural production factors the framework is used to analyse barriers to the existence of the major intertemporal and factor markets it is applied specifically to land scarce environments for which it provides an internally consistent explanation for many of the well documented institutional features of such settings in addition the analysis provides new implications for among other phenomena the inter relationships among ownership holdings operational scale family size and factor productivity for the scarcity of animal rental markets and use of animals as collateral for the renting out of land by small landowners and for the existence of plantations for certain crops

food insecurity income inequality and the changing comparative advantage in world agriculture i would like to argue in this article that in the process of economic development in land poor countries in asia agriculture faces three distinctly different problems food insecurity sectoral income inequality and the declining food self sufficiency associated with the declining comparative advantage in agriculture at the high income stage massive imports of food grains to asia if they occur will aggravate the world food shortage which will have significant implications for the poverty incidence in the world i argue that in order to avoid such a tragedy asia should expand farm size to reduce labor cost by adopting large scale mechanization sub saharan africa should realize a green revolution in grain production and latin america should further expand its grain production capacity

factor markets and resource allocation in colonial punjab it is often argued that agricultural factor markets in colonial india were underdeveloped leading to inefficient resource use and slow agricultural development however there is little econometric evidence on these issues this article outlines a model which incorporates the factor market imperfections discussed in the literature and tests the model against data from the punjab there is in the statistical sense evidence of resource misallocation however these effects are too small to be of much economic significance

testing household specific explanations for the inverse productivity relationship the inverse relationship between land productivity and farm size is an old and puzzling empirical regularity most explanations for this relationship rely on market imperfections that jointly determine the farm size and the household s shadow price of some productive inputs we use plot level data from the icrisat vls to assess whether these household specific theories can explain the puzzle the data exhibit plots of different sizes being simultaneously cropped by the same household the inverse relationship is shown to hold true with the same magnitude across the plots of each household thus cross household heterogeneity does not suffice to explain the puzzle

is small beautiful farm size productivity and poverty in asian agriculture the debate on the relationship between farm size and productivity has gone through a complete circle in the 1960s it was perceived that small farms were efficient because they can fully use their resources particularly family labor and they can monitor their production activities closely but in the 1970s and 1980s as many asian countries rapidly moved towards industrialization and urbanization small farms were considered a major obstacle in this process

the inverse relationship between productivity and farm size a test using regional data from india the farm size productivity debate for india needs little introduction it has occupied a prominent position in the agricultural economics literature since 1962 when sen observed that indian farm management data revealed an inverse relationship between farm size and yields per acre since then no fewer than twenty journal papers have appeared on this subject sen 1975 the objective of this paper is to test two hypotheses that were either not given enough attention or left unresolved in the debate the first is that the inverse relationship is valid for all of indian agriculture it is not merely a phenomenon observed in a few sample villages this means a test of the hypothesis that the small farm sector as a whole is more productive than the large farm sector in indian agriculture the second hypothesis is that the inverse relationship is true only of a traditional agriculture and that it breaks down with technical progress a methodology is developed below which uses cross sectional regional data to test the two hypotheses simultaneously on applying this methodology to indian district level data 272 districts for 1970 71 it is found that the hypothesis of the small farm sector being more productive than the large farm sector cannot be rejected at low levels of agricultural technology but can be rejected at higher levels this suggests that the inverse relationship between yields and farm size although valid for a traditional agriculture cannot be assumed to exist in an agriculture experiencing technical change

how not to measure sustainable value and how one might abstract sustainability is a complex multidimensional concept that entails economic environmental and social aspects the sustainable value sv method developed by f figge and t hahn ecol econ 48 2004 173 187 is one of the most promising attempts to measure sustainability performance of firms sv measures corporate contributions to sustainability by valuing resource use based on the opportunity cost which must be estimated this paper critically examines figge and hahn s estimator for opportunity cost and shows that the proposed estimator rests on a number of strong unrealistic assumptions evidence from monte carlo simulations conducted by authors shows that the proposed estimator performs very poorly even under ideal conditions having identified shortcomings in the sv method we review some econometric approaches with a proven statistical foundation which might be usefully applied in the present context

impacts on rural poverty of land based targeting further results for bangladesh abstract landholding class has been widely advocated as a targeting indicator for fighting rural poverty in south asia and elsewhere supporters have pointed to the correlation between poverty and lack of land and have also claimed that land based targeting raises output the paper tries to assess the impact on rural poverty in bangladesh of a benchmark policy under seemingly ideal conditions generalizing earlier results of ravallion 1989 on improved data poverty is reduced though the maximum gains turn out to be small even allowing for pro poor productivity effects consistent with the farm size productivity relationship in bangladesh the gains are likely to be even smaller under real world incentive and political economy constraints

the relation between farm size and farm productivity the role of family labor supervision and credit constraints abstract the paper shows that if the performance of hired farmhands is affected by supervision from family members and if the availability of credit is dependent on the amount of land owned then a systematic positive or negative relationship between per acre yields and farm size will prevail a model with no supervision effects on labor productivity would predict that yields are unaffected by farm size the paper also investigates the relation between land utilization and owned holding size when land rental possibilities are limited results are shown to be compatible with various observed patterns in ldcs