smallholder market participation concepts and evidence from eastern and southern africa abstract this paper reviews the evidence on smallholder market participation with a focus on staple foodgrains i e cereals in eastern and southern africa in an effort to help better identify what interventions are most likely to break smallholders out of the semi subsistence poverty trap that appears to ensnare much of rural africa the conceptual and empirical evidence suggests that interventions aimed at facilitating smallholder organization at reducing the costs of intermarket commerce and perhaps especially at improving poorer households access to improved technologies and productive assets are central to stimulating smallholder market participation and escape from semi subsistence poverty traps macroeconomic and trade policy tools appear less useful in inducing market participation by poor smallholders in the region

measuring food security in africa conceptual empirical and policy issues the definition of food security has broadened since the term first came to prominence at the 1975 world food conference discussions of food security in the midand late 1970s were strongly influenced by the shortfall in world food production and run up in prices early in that decade initially food security meant avoiding transitory shortfalls in the aggregate supply of food by the early 1980s however the world food supply situation had evolved markedly the famines striking africa took place in a world awash in grain clearly inadequate levels of global food supply were not the cause of hunger sen s work focused attention on the lack of access by households and individuals to food because of low incomes entitlements as a cause of food insecurity and other research has shown that for most of the hungry in the world this lack of access is chronic not transitory thus the conceptual understanding of food insecurity has gradually evolved over the past fifteen years to include not only transitory problems of inadequate supply at the national level but also chronic problems of inadequate access and unequal distribution at the household level d spite a broader understanding of the complexity of food insecurity policy makers must still look for easily measured indicators to design programs to reach the food insecure often these indicators are measures of regional or national food supply or its correlates such as rainfall as current information on household or individual entitlements to food is usually lacking s me policy makers may think of supply shortfalls or the lack of domestic food self suffi

official and parallel cereals markets in senegal empirical evidence abstract senegal s experience with cereals market regulation grows out of a colonial legacy that accepts a preeminent role for the state as protector of producers and comsumers yet the reality of cereals market operation in senegal differs substantially from that specified in regulatory texts and satisfaction of certain performance objectives is achieved largely because of illegal parallel market activity involving violations of official rules and policies survey data collected in northern and central senegal provide valuable insights into the operation of a heterogeneous cereals marketing system made up of parallel channel marketing agents authorized private traders public sector marketing organizations and parastatals

assessing the impact of food policy research rice trade policies in viet nam abstract the economic impact of marketing and trade policy research in viet nam conducted by the international food policy research institute ifpri is assessed using a novel benefit cost framework it measures the economic value of the time saved in hastening the policy responses of the government of vietnam extensive interviews with partners and stakeholders in the research clearly indicated that the time saving was a legitimate measure of the influence of ifpri on decision making linking a spatial equilibrium model with income distribution analysis based on national household surveys allowed ifpri to satisfy policymakers that relaxing rice export quotas and internal trade restrictions on rice would not adversely impact on regional disparities and food security and would have beneficial effects on farm prices and poverty these were major concerns of policymakers prior to the ifpri research project the research on these and other policy options gave a degree of confidence to policymakers that relaxing the controls would be in viet nam s national interest they made these decisions earlier than would have been the case without the ifpri research the policy assessment framework is used to measure the economic impact of the policy changes themselves and in particular the contribution of ifpri s work with viet nam on the policies from 1995 to 1997 the relaxation of rice export quotas and internal restrictions on rice trade made by the government of viet nam in 1995 97 are estimated to have had a present 1995 value to viet nam using a 5 discount rate of 222 million by 2000 rising to 966 million by 2020 for an incremental research investment of less than us 1 million a conservative estimate of the benefit to viet nam of the ifpri contribution to the policy changes effected in viet nam from the reduction in the policy implementation lag indicates a present value in 1995 terms of us 45 million this represents a benefit cost ratio of 56 a more optimistic assessment is that the present value is us 91 million with a benefit cost ratio of 114 in addition to the welfare gains to viet nam there were sizeable gains to the rest of the world from ifpri s contribution inclusion of these benefits increases present value and benefit cost estimates by 34 to 84 around 38 of the contribution of ifpri is estimated to have accrued to the rest of the world as viet nam is now a major player in world rice trade

marketing maize and tef in western ethiopia implications for policies following market liberalization abstract ethiopia has recently eliminated fixed grain prices and has reduced its role in purchasing grain from farmers results indicate that private sector marketing of maize and tef is characterized by high risks and variable gross margins returns from storing grain for later sale can be high but predicting price movements is risky interspatial arbitrage is seriously flawed correlations in prices between markets range from weak to strong the government s restriction of the movement of grain and market interventions during the survey period are partly responsible for these trends proposed measures to improve marketing performance include 1 improving feeder roads 2 providing credit to traders and transporters 3 improving farm level maize storage facilities and 4 permitting markets in an area to be held on different days of the week

immiserized growth in liberalized agriculture abstract this paper offers a simple model that reconciles rivalrous claims about liberalization s impact on low income agrarian economies growth can accompany smallholder welfare reduction the model developed here reverses the causality of bhagwati s immiserizing growth model price shocks cause welfare effects that drive output response rather than output shocks causing price shocks and then welfare effects as in the trade theoretic original immiserized growth seems a plausible explanation for some important cases e g the malagasay case considered here in which liberalization appears to have engendered both real agricultural growth and heightened food security stress among smallholder food producers

economies of scope and the cash crop food crop debate in senegal abstract the government of senegal plans to achieve national food self sufficiency by inducing farmers to switch away from cash crops toward food crop production this paper examines selected economic consequences of the planned substitution using empirical data recently collected in southeastern senegal cost function estimates suggest that farmers are currently producing too much food crop and too little cash crop output given existing technology and observed relative prices moreover economies of scope in producing both food crops and cash crops on the same farm result in a 22 cost saving relative to growing both types of crops on separate specialized farms

cereals demand in the sahel and potential impacts of regional cereals protection abstract recent policy debate in the sahel has focused on a regional protection zone for cereals this paper discusses crosscountry evidence of consumption patterns and the sensitivity of these to policy variables and considers potential income distribution and efficiency impacts of a rice tariff increase a tariff would hurt the poor in the short term because the poor depend to a large extent on rice as a fast food purchased from street vendors the trend toward rice consumption is a long term structural phenomenon linked to urbanization rather than to short term price changes maize and millet sorghum are substitutes in consumption which should serve to encourage development of maize in the guinean zone to help assure sahel food security in drought years

computable general equilibrium models adjustment and the poor in africa abstract sahn and others at cornell have conducted a major research program on the impact of adjustment policies on the poor in africa making use of computable general equilibrium cge models their work was summarized in world development april 1996 they concluded that adjustment policies have not hurt and may have helped the poor this paper shows that such conclusions are highly dependent on the assumptions made about parameters relationships and closure in the models moreover in madagascar and tanzania where the cornell models suggest the poor benefited from adjustment there is evidence of worsening social and economic indicators our conclusion is that the cornell results are more a reflection of the assumptions made in developing the cge models than of reality

comparative reliability of the dichotomous choice and open ended contingent valuation techniques abstract the comparative reliability of dichotomous choice and open ended contingent valuation methods cvm is evaluated by resurvey of the same households 9 months after their original survey test retest correlations on willingness to pay are statistically significant at the 1 level and range from 0 57 for the dichotomous choice cvm to 0 62 for the open ended cvm the test retest correlations were not statistically different between dichotomous choice and open ended cvm a likelihood ratio test for temporal stability of each method s willingness to pay functions indicates stability half of the time for both methods

a solvable continuous time dynamic principal agent model abstract i study the provision of incentives in a continuous time dynamic moral hazard model with hidden actions and hidden states i consider a principal agent model with linear production and exponential utility whose explicit solution allows me to show how allocations are distorted for incentive reasons and how access to hidden savings further alters allocations i solve the model by applying a stochastic maximum principle where the co state variables from the agent s optimization problem become state variables for the principal s problem of choosing an optimal contract i show that the main effect of moral hazard is a distortion on the effort margin with a smaller effect on the intertemporal consumption allocation access to hidden savings shuts down the intertemporal distortions and increases the effort distortion i also show how the optimal contracts can be implemented via a constant equity share a constant flow payment and a constant tax on savings

the liberalization of rice marketing in madagascar abstract madagascar s experience with rice marketing liberalization between 1985 and 1988 illustrates the many obstacles in the way of effective deregulation of agricultural markets the resistance of ambiguous regulation continuing limits on free entry attempts at cartelization and tenacious resistance of existing stakeholders and institutions at the same time the experience shows the ability of higher prices and freer markets to overcome much of this resistance and to stimulate production even in the presence of so called structural constraints such as poor roads weak extension services inadequate credit systems and input supply arrangements

interpretation and temporal stability of cv bids for wildlife existence a panel study existence values are playing an increasingly important role in wildlife preservation decisions but little is known about how these values behave over time and value estimates may often be misinterpreted panel study results suggest that although existence values may be relatively stable many individuals respond to contingent valuation by bidding their fair share or for the satisfaction from contributing to a good cause such as environmental quality although payment of fair share may represent a lower bound estimate of existence value payment for a good cause may or may not be closely related to the value of the resource itself

cash crops and food security evidence from ethiopian smallholder coffee producers one of the central questions in food policy debates has been the role of cash cropping for achieving food security in low income countries we revisit this question in the context of smallholder co

food security strategies under extremely adverse conditions the determinants of household income and consumption in rural mozambique abstract this paper uses household survey data from war torn northern mozambique to examine the factors associated with higher incomes and improved rural household food security incomes and calorie consumption were found to be low and variable in each district and both are highly correlated with land holdings the central role of land holdings is largely a result of serious market failure food market participation rates and the proportion of net buyers are lower than in other sub saharan africa ssa research purchased food as a percentage of total caloric intake and off farm income as a percentage of total income are both very low by ssa standards in short surveyed smallholders have adopted a strategy of marked reliance on farm based own production to ensure their survival it is suggested that land holdings will continue to be key determinants of household income and consumption for the foreseeable future broad based rural development efforts possibly organized around existing cotton growing enterprises may offer one way out of the poverty trap for smallholders

who are the world s food insecure new evidence from the food and agriculture organization s food insecurity experience scale summary until recently there was lacking a common food security measure and the necessary data to study the individual level determinants of food insecurity around the world in 2014 the food and agriculture organization s voices of the hungry project developed an experiential measure of food insecurity the food insecurity experience scale fies translated it into 200 languages and contracted gallup inc for collection of data through the gallup world poll this is the first paper that identifies and examines the common determinants of food insecurity in 134 countries using this cross country comparable experiential measure of food insecurity we also investigate whether and to what extent the common determinants of food insecurity identified in a global model differ across rankings of economic development using a series of multilevel linear probability models we find that the five characteristics associated with the largest increase in the likelihood of experiencing food insecurity around the world are having low levels of education weak social networks less social capital low household income and being unemployed we also find significant heterogeneity in the determinants of food insecurity over development rankings this study is an important first step in utilizing the new fies to document risk factors of food insecurity around the globe

a satisfactory benefit cost indicator from contingent valuation abstract standard economic concepts are used to develop a model of individual behavior when subject to the constraints of the contingent valuation choice context the model yields refutable consequences that are consistent with previously reported empirical findings including some that have been thought to be anomalous the model is used to show that different contingent valuation formats have predictably different performance characteristics notably the hicksian compensating measures are satisfactory benefit cost indicators when elicited using any one of several formats identified in the text of the formats examined one form of a policy referendum appears to have the most satisfactory characteristics overall we conclude that contingent valuation is a progressing research program

insurance and taxation over the life cycle we consider a dynamic mirrlees economy in a life cycle context and study the optimal insurance arrangement individual productivity evolves as a markov process and is private information we use a first order approach in discrete and continuous time and obtain novel theoretical and numerical results our main contribution is a formula describing the dynamics for the labour income tax rate when productivity is an ar 1 our formula resembles an ar 1 with a trend where i the auto regressive coefficient equals that of productivity ii the trend term equals the covariance productivity with consumption growth divided by the frisch elasticity of labour and iii the innovations in the tax rate are the negative of consumption growth the last property implies a form of short run regressivity our simulations illustrate these results and deliver some novel insights the average labour tax rises from 0 to 37 over 40 years whereas the average tax on savings falls from 12 to 0 at retirement we compare the second best solution to simple history independent tax systems calibrated to mimic these average tax rates we find that age dependent taxes capture a sizable fraction of the welfare gains in this way our theoretical results provide insights into simple tax systems copyright 2013 oxford university press

the causes of africa s food crisis abstract this paper examines the causes of africa s food crisis by examining patterns of food imports the econometric results indicate that the rise in food imports during 1970 87 can be explained by a combination of demographic policy and economic factors which have raised domestic demand for imported food these factors include urban migration peaks in income especially during commodity booms lower international prices of food and distorted exchange rates after accounting for these factors the residual trend in food imports per capita is negative over this period evidence is also presented showing that in ghana policy reforms have led to reverse migration from urban to rural areas

efficient allocations in dynamic private information economies with persistent shocks a first order approach this article studies efficient allocations in a dynamic private information economy with a continuum of idiosyncratic shocks that are persistent i develop a first order approach for this environment and show that the problem has a simple recursive structure that relies on only a small number of state variables making the problem tractable i find sufficient conditions that guarantee that the first order approach is valid to illustrate the first order approach i numerically compute the efficient allocations in a mirrleesean economy with productivity shocks that follow a random walk and verify the validity of the first order approach i show that persistent shocks create a new trade off where the social planner decreases the informational rent of the agent today at the cost of providing higher insurance in the future copyright 2013 oxford university press

reliability and predictive validity of contingent values does the nature of the good matter abstract because the contingent valuation mechanism cvm elicits verbal reports of maximum willingness to pay and not actual willingness to pay analysts have expressed doubts about the reliability and validity of contingent values for commodities such as environmental amenities this skepticism is usually attributed to the amorphous nature of the commodity and to peoples lack of familiarity or experience however our comparison of two commodities which lie at polar extremes of the private good public good continuum suggests that the nature of the good may have little influence on the reliability and predictive validity of the cvm instead aspects of the cvm itself e g explicit payment obligation may be more important for high intention behavior consistency

food marketing and pricing policy in eastern and southern africa a survey abstract this article surveys the empirical record of grain marketing and pricing policy in eastern and southern africa over 1930 1995 the paper addresses five key issues with major implications for food policy throughout africa a why the anticipated supply response to market liberalization has not yet occurred b why the common assumption of state taxation of farmers to support a cheap food policy does not apply in most of the countries in the region c why the temporary successes of the state led approach to stimulating smallholder grain production were unsustainable d why the elimination of government food subsidies associated with market reform has not adversely affected consumers and e why the fiscal cost of the marketing systems at least initially worsened rather than improved after the reforms were implemented in most countries the key future challenges for marketing policy are how to develop coordinated and financially sustainable input finance and commodity marketing systems for raising productivity growth in smallholder agriculture while overcoming inherited agricultural dualism and how to mitigate the effects of food price instability in a cost effective manner

higher fuel and food prices impacts and responses for mozambique rising world prices for fuel and food represent a negative terms of trade shock for mozambique the impacts of these price rises are analyzed using various approaches detailed price data show that the world price increases are being transmitted to domestic prices short run net benefit ratio analysis indicates that urban households and households in the southern region are more vulnerable to food price increases rural households particularly in the north and center often benefit from being in a net seller position longer term analysis using a computable general equilibrium cge model of mozambique indicates that the fuel price shock dominates rising food prices from both macroeconomic and poverty perspectives again negative impacts are larger in urban areas the importance of agricultural production response in general and export response in particular is highlighted policy analysis reveals difficult trade offs between short run mitigation and long run growth improved agricultural productivity has powerful positive impacts but remains difficult to achieve and may not address the immediate impacts of higher prices

changes needed in agricultural policy for female headed farm families in tropical africa abstract the decline in per capita agricultural production has been reversed somewhat in tropical africa by the structural adjustment programs which have increased producer prices liberalized marketing and devalued currencies but the 30 of smallholder farm households which are female headed will not be assisted much due to their special constraints of shortages of labor and credit lack of extension visits and appropriate labor saving technologies for these households the authors argue improved extension services credit for agricultural inputs small ruminant animals and poultry labor saving devices and craft inputs will be necessary to increase their incomes and levels of living

market based incentives we study optimal incentives in a principal agent problem in which the agent s outside option is determined endogenously in a competitive labor market in equilibrium strong performance increases the agent s market value when this value becomes sufficiently high the threat of the agent s quitting forces the principal to give the agent a raise the prospect of obtaining this raise gives the agent an incentive to exert effort which reduces the need for standard incentives like bonuses in fact whenever the agent s option to quit is close to being in the money the market induced incentive completely eliminates the need for standard incentives

the impact of export crop production on nutritional status in cote d ivoire abstract in exploring the implications of the commercialization of agriculture on nutrition in cote d ivoire this paper found that sales of export crops combined with the domestic marketing of food crops represent the most important sources of incomes for rural households rich and poor alike increasing the price of the heavily taxed export crops cocoa and coffee will raise incomes throughout the income distribution increasing the profitability and productivity of cotton will not only raise rural incomes but will also have positive distributional consequences a reduced form nutrition model was estimated in order to examine the impact of income as well as the allocation of land to the production of the major export crops rather than to food crops on nutritional status results indicate that higher incomes improve long term nutritional status and that the share of land allocated to export crops does not affect the nutritional status of preschool aged children even when controlling for income in combination these facts suggest that raising incomes through exploiting comparative advantage in export crops such as coffee cocoa and cotton will have positive nutritional outcomes in cote d ivoire

informing food security decisions in africa empirical analysis and policy dialogue discussions of economic and agricultural development in africa have focused heavily in recent years on structural adjustment i e basic policy changes aimed at allowing international and domestic markets to play a greater role in coordinating national economic activities often these structural adjustments and accompanying policies aimed at improving economic performance have been based on several implicit assumptions about how african food systems operate yet for many countries little empirical information has been available to test these assumptions hence designing policies too often becomes an exercise in planning without facts this paper argues that not only is there a need to base food security and structural adjustment policies more firmly on empirical information but that the process by which the information is obtained is as important as the information itself agricultural economists and other social scientists can and increasingly should design policy research in africa in ways that simultaneously increase effective demand for empirical information as an input into the ongoing policy process and augment african capacity continually to inform policy deliberations we illustrate the payoffs to such an approach by drawing on selected experience in several african countries weber

exchange rate fiscal and agricultural policies in africa does adjustment hurt the poor abstract trade exchange rate fiscal and agricultural sector policy reforms are the pillars of structural adjustment programs in africa results indicate that trade and exchange rate reforms are associated with a large decline in economic rents and a shift in relative prices that favor the rural and urban poor fiscal reforms have not brought about draconian belt tightening measures although the incidence of public spending particularly in the social sectors and in terms of public sector employment remains far from progressive reduction of export crop taxation contributes to higher incomes for the poor and domestic food crop liberalization has not led to increases in purchase prices of staple commodities for most low income households

justifying the first order approach to principal agent problems it is of interest to know when the incentive compatibility conditio n in principal agent problems can be replaced by the condition that the agent s expected utility be stationary in effort the mirrlees rogerson conditions do not work if the principal can observe more than one observable statistic also the mirrlees rogerson assumption that the distribution function of output is convex in the agent s action is unsatisfactory even in the context of the basi c model it is too restrictive the paper presents a suite of conditio ns that are applicable to the multistatistic case and replaces the objectionable convex distribution function assumption copyright 1988 by the econometric society

determinants and effects of income diversification amongst farm households in burkina faso using four years of household data from three agroecological zones in burkina faso sahelian sudanian and guinean the article examines the determinants and effects of household income diversification harvest shortfalls and terms of trade are found to drive diversification but land constraints do not income diversification is associated with higher incomes and food consumption and more stable income and consumption over years

short term contracts and long term agency relationships abstract long term contracts are valuable only if optimal contracting requires commitment to a plan today that would not otherwise be adopted tomorrow we show that commitments are unnecessary and hence short term contracts are sufficient if 1 all public information can be used in contracting 2 the agent can acess a bank on equal terms with the principal 3 recontracting takes place with common knowledge about technology and preferences and 4 the frontier of expected utility payoffs generated by the set of incentive compatible contracts is downward sloping at all times

household food security and nutrition monitoring the malawi approach to development planning and policy interventions abstract this paper documents implementation of food security and nutrition monitoring fsnm at the household level as a process of information generation for food and nutrition planning and policy making a case study of malawi is presented to describe various stages involved in generating data and converting them into policy decisions the institutional arrangement for food security and nutrition monitoring in malawi is presented along with a conceptual framework for identifying factors that influence food security and nutritional status of the population the process of implementing food security and nutrition monitoring in malawi is presented in two parts the process of information generation and the use of results in policy implementation the costs and benefits of food security and nutrition monitoring in malawi are also documented presenting the lessons from the malawi approach the paper concludes that a decentralized system of data collection processing and analysis is more likely to be successful in planning and policy making for food security and nutritional improvements

the microeconomics of the developmental paradox on the political economy of food price policy abstract a longstanding puzzle in comparative economics is the developmental paradox the tendency for government support for agriculture to increase with national income and to decrease with the proportion of economic activity and of the population in agriculture this paper offers a microeconomic explanation for that puzzle it establishes analytically the microeconomic basis for coalition alignments with respect to food price policy then numerically simulates the comparative static effects of alternative food policies on coalition structure a parsimonious household model applied to a heterogeneously endowed society demonstrates how variation in individual welfare effects might beget distinct coalitions in the debate over food price policy and how those policies are inextricably linked to land population and technology policies in food agriculture moreover coalition alignments on particular policy debates are path dependent in particular food price policy creates its own political support

dynamic managerial compensation a variational approach abstract we study the optimal dynamics of incentives for a manager whose ability to generate cash flows changes stochastically with time and is his private information we show that distortions aka wedges under optimal contracts may either increase or decrease over time in particular when the manager s risk aversion and ability persistence are small distortions decrease on average over time for sufficiently high degrees of risk aversion and ability persistence instead distortions increase on average with tenure our results follow from a novel variational approach that permits us to tackle directly the full program thus bypassing some of the difficulties of the first order approach encountered in the dynamic mechanism design literature

contingent valuation a new perspective after several decades of academic research on the contingent valuation cv method a consistent behavioral explanation of hypothetical bias is still lacking based on evidence from economics economic psychology and the political sciences i propose an explanation that is based on two simple working hypotheses about respondent behaviour in contingent valuation surveys the first hypothesis is that survey respondents are unable to form consistent preferences about unfamiliar goods unless the choice context offers reliable informative cues that can be rationally exploited in simplified heuristics the second hypothesis is that the probability and impact of strategic responses in dichotomous choice questions about public goods depends on the extent to which the presented hypothetical costs differ from the actual costs the literature on hypothetical bias is revisited in the light of these behavioral hypotheses i find that the hypotheses are generally supported by the empirical data moreover the hypotheses are able to explain several important empirical phenomena that previous research has not been able to explain in particular they solve the puzzle that pre election polls but not cv surveys are able to predict actual referendum outcomes and they explain why income effects on willingness to pay are lower in cv responses than in actual votes if confirmed by further studies the hypotheses will have important implications for future research and practice first the hypothetical costs presented in the dichotomous choice question should to be close enough to the actual costs to be credible to all respondents this can be achieved by specifying the costs as a percentage rather than absolute change in taxes second the respondents should be given the option to answer based on information about the positions of large parties and interest groups with known political orientation rather than based on the raw policy information theory and evidence suggest that this new survey paradigm largely eliminates the fundamental problems of the conventional stated preference methods

market based conservation and local benefits the case of argan oil in morocco abstract market based approaches to biodiversity conservation gained popularity in the 1990s the success of these strategies hinges on first the successful creation or expansion of target markets and second the beneficial involvement of local stakeholders in these markets so that improved incentives induce conservation this paper evaluates these two key elements in the case of argan oil commercialization in southwestern morocco the principal finding is that even when locals appear well positioned to reap ex post benefits one can reject the hypothesis that successful resource commercialization necessarily stimulates local development and reduces poverty most locals participate only superficially in the new and expanded markets for argan oil and the benefits that do trickle down to local households appear to be regressively distributed both regionally and between households the key lies in understanding how opening or expanding markets may induce endogenous product differentiation that easily excludes locals especially the poor and how ex ante market access a variable commonly correlated with wealth conditions households capacity to participate in market induced producer windfalls

persistent private information this paper studies the design of optimal contracts in dynamic environments where agents have private information that is persistent in particular i focus on a continuous time version of a benchmark insurance problem where a risk averse agent would like to borrow from a risk neutral lender to stabilize his utility the agent privately observes a persistent state variable typically either income or a taste shock and he makes reports to the principal i give verifiable sufficient conditions showing that incentive compatible contracts can be written recursively conditioning on the report and two additional state variables the agent s promised utility and promised marginal utility of the private state i then study two examples where the optimal contracts can be solved in closed form showing how persistence alters the nature of the contract unlike the previous discrete time models with independent and identically distributed i i d private information the agent s consumption under the contract may grow over time furthermore in my setting the efficiency losses due to private information increase with the persistence of the private information and the distortions vanish as i approximate an i i d environment

does food aid really have disincentive effects new evidence from sub saharan africa summary limited empirical evidence exists either to refute or confirm the pervasive belief that food aid has significant disincentive effects on recipient food production using household level data from rural ethiopia we demonstrate that while simple descriptive statistics appear consistent with the disincentive effects hypothesis once one controls properly for the endogeneity of food aid receipt no empirical support remains for the hypothesis that food aid creates disincentive effects among recipient households the macro economic evidence yields similar findings applying vector autoregression methods to national level data controlling for possible confounding variables we find that food aid has no disincentive effect on food production

interdependence between cash crop and staple food international prices across periods of varying financial market stress abstractthis paper investigates the price dynamics between a selection of international staple food and cash crop futures prices this price interaction is particularly relevant for developing coun

on price risk and the inverse farm size productivity relationship abstract the oft observed inverse relationship between farm size and productivity has elicited several explanations having important policy and theoretical implications using advances in the analysis of price risk effects on producer behavior and a simple two period model of an agricultural household that both produces and consumes under price uncertainty at the time labor allocation decisions are made this paper demonstrates analytically that a non degenerate land distribution and price risk can together produce an inverse relationship even absent any of the more common explanations empirical evidence from madagascar confirms the plausibility of this intuitive explanation for the phenomenon

testing for temporal reliability in contingent valuation with time for changes in factors affecting demand we develop a temporal reliability test of the contingent valuation method separate random samples were administered the same telephone survey five years apart in the retest respondents have less favorable attitudes toward the environment given this result a temporally reliable contingent valuation would find lower willingness to pay we find that the estimates are temporally reliable after accounting for attitudes which have changed over the five year period values are not significantly different five years apart this study provides additional evidence that use of the contingent valuation method can provide useful information for environmental policy analysis

unemployment insurance with hidden savings abstract this paper studies the design of unemployment insurance when neither the searching effort nor the savings of an unemployed agent can be monitored if the principal could monitor the savings the optimal policy would leave the agent savings constrained with a constant absolute risk aversion cara utility function we obtain a closed form solution of the optimal contract under the optimal contract the agent is neither saving nor borrowing constrained counter intuitively his consumption declines faster than implied by hopenhayn and nicolini 1997 1 the efficient allocation can be implemented by an increasing benefit during unemployment and a constant tax during employment

optimal cartel equilibria with imperfect monitoring abstract there exist optimal symmetric equilibria in the green porter model 4 8 having an elementary intertemporal structure such an equilibrium is described entirely by two subsets of price space and two quantities the only production levels used by firms in any contingency the central technique employed in the analysis is the reduction of the repeated game to a family of static games

self reported food insecurity in africa during the food price crisis this article analyzes data on self reported food insecurity of more than 50 000 individuals in 18 sub saharan african countries over the period 2005 2008 when global food prices increased dramatically the average level of self reported food insecurity was high but remarkably stable over time at about 54 however this average hides large heterogeneity both within countries and across countries in eight of the sample countries self reported food security improved while it worsened in the ten other countries our results suggest that heterogeneous effects in self reported food security are consistent with economic predictions as they are correlated with economic growth and net food consumption both at the household and country level specifically in the face of rising food prices self reported food security improved on average in rural households while it worsened in urban households a finding that holds when using global prices or domestic food prices improvements in food security over time were also positively correlated with net food exports and gdp per capita growth while the self reported indicator used in this paper requires further study and one should carefully interpret the results our findings suggest the need for a critical evaluation of the currently used data and numbers in the public debate on food prices and food insecurity

cash cropping and food crop productivity synergies or trade offs the case for promoting export oriented cash crops in africa has generally been based on their direct potential contribution to agricultural productivity and small farmer incomes a relatively neglected avenue of research concerns the synergistic effects that cash cropping can have on other household activities including food production the conventional view that cash crops compete with food crops for land and labour neglects the potential for cash crop schemes to make available inputs on credit management training and other resources that can contribute to food crop productivity which might otherwise not be accessible to farmers if they did not participate in cash crop programs this article builds on previous research by hypothesising key pathways by which cash crops may affect food crop activities and empirically measuring these effects using the case of cotton in gokwe north district in zimbabwe analysis is based on instrumental variable analysis of survey data on 430 rural households in 1996 results indicate that after controlling for household assets education and locational differences households engaging intensively in cotton production obtain higher grain yields than non cotton and marginal cotton producers we also find evidence of regional spill over effects whereby commercialisation schemes induce second round investments in a particular area that provide benefits to all farmers in that region regardless of whether they engage in that commercialisation scheme the study suggests that the potential spill over benefits for food crops through participation in cash crop programs are important to consider in the development of strategies designed to intensify african food crop production

are we overestimating the negative impact of higher food prices evidence from ghana most studies of the welfare impact of higher food prices adopt deaton s approach based on the first order effect of prices changes using income and expenditure survey data this paper explores the impact of higher maize and food prices in ghana and considers the sensitivity of results to changes in several assumptions if second order effects are included incorporating household response to price changes the welfare impact of food price increases is more positive but only modestly so however if we assume that marketing margins are constant in real terms rather than proportional to prices the welfare impact is substantially more positive these findings highlight the need for more research on the behavior of marketing margins under volatile prices

subsidized imports currency devaluation and agricultural decline impact on food supply and demand balance in zaire abstract an adjusted small world trade liberalization model with 1984 as the base year was used to predict changes in zaire s net agricultural trade due to export subsidies from developed countries currency devaluation and stagnation in small farm technology given the availability of low cost food grain imports under the us export enhancement program zairian wheat imports increase 8 2 in the intermediate run assuming foreign exchange is available for food imports furthermore if improvements in agricultural technology are not forthcoming output of food and export crops will decline resulting in a loss of revenue from the farm sector and a deterioration in the country s balance of trade however since 1983 currency devaluation appears to have had the largest impact on net trade in food and export crops

export liberalization and household welfare the case of rice in vietnam vietnam has rapidly become one of the three largest rice exporters in the world in spite of a binding export quota this article uses a multimarket spatial equilibrium model to examine the effect of further liberalization on regional rice prices household data are then used to calculate the welfare impact of these price changes on different household groups the results suggest that although rice export liberalization would raise food prices and exacerbate regional inequality it would also increase average real income and reduce slightly the incidence and severity of poverty we explore several explanations of these apparently paradoxical results

repeated principal agent relationships with lending and borrowing abstract it is shown optimal long term contracts are strictly better than a series of unrelated short term contracts for two reasons long term contracts allow risk to be spread over time and the agent s intertemporal choices provide information about the unobservable random variable

efficient allocations with hidden income and hidden storage we consider an environment in which individuals receive income shocks that are unobservable to others and can privately store resources we provide a simple characterization of the unique efficient allocation of consumption in cases in which the rate of return on storage is sufficiently high or alternatively in which the worst possible outcome is sufficiently dire we show that unlike in environments without unobservable storage the symmetric efficient allocation of consumption is decentralizable through a competitive asset market in which individuals trade riskfree bonds among themselves in this paper we consider an environment in which individuals have random income and can accumulate assets through a storage technology their income realizations and their asset position are private information given these informational frictions we provide a simple characterization of the unique efficient allocation of consumption in cases in which the rate of return on storage is sufficiently high or alternatively in which the worst possible outcome is sufficiently dire we show that the symmetric efficient allocation of consumption is decentralizable through a competitive asset market in which individuals trade risk free bonds among themselves there is a large prior literature which examines the characteristics of efficient risksharing in dynamic settings in the presence of private information unlike our paper this literature generally finds that efficient allocations do not coincide with the equilibrium allocations of any economy with a competitive bond market see atkeson and lucas 1992 in particular the key difference between our paper and these preceding ones is that the earlier literature assumes either that agents cannot accumulate resources over time or that if they can this accumulation is observable in contrast we assume that both agents incomes and their stored resources are private information it is this combination of assumptions that leads to our result our findings are reminiscent of allen s 1985 he considers a dynamic principalagent relationship in which the agent is risk averse and has hidden stochastic income the

theoretical incentive properties of contingent valuation questions do they matter in the field abstract green et al 1998 green d jacowitz k e kahneman d mcfadden d 1998 referendum contigent valuation anchoring and willingness to pay for public goods resource and energy economics 20 2 85 116 show theoretically that stated preference questions about public services can be framed in such ways that if the subjects accept the frame the payoff maximizing behavior will be to answer truthfully one key element of such a theoretically incentive compatible framing is that the hypothetical decision rule specified in the survey instrument is understood to be a majority rule rather than the efficiency rule typically used in cost benefit analysis we conducted field experiments in germany and switzerland to test if a referendum framing as suggested by green et al is effective in reducing strategic misrepresentation in a contingent valuation setting we did not find the expected effects of the framing treatments on stated willingness to pay or on individuals stated beliefs about the social choice context the results do not support hopes that a theoretically incentive compatible framing could be purposefully used to invoke the specific beliefs about the linkage between responses and policy implementation that would make stated preference questions incentive compatible

aggregation and linearity in the provision of intertemporal incentives we consider the problem of providing incentives over time for an agent with constant absolute risk aversion the optimal compensation scheme is found to be a linear function of a vector of n accounts which count the number of times that each of the n kinds of observable events occurs the number n is independent of the number of time periods so the accounts may entail substantial aggregation in a continuous time version of the problem the agent controls the drift rate of a vector of accounts that is subject to frequent small random fluctuations the solution is as if the problem were the static one in which the agent controls only the mean of a multivariate normal distribution and the principal is constrained to use a linear compensation rule if the principal can observe only coarser linear aggregates such as revenues costs or profits the optimal compensation scheme is then a linear function of those aggregates the combination of exponential utility normal distributions and linear compensation schemes makes computations and comparative statics easy to do as we illustrate we interpret our linearity results as deriving in part from the richness of the agent s strategy space which makes it possible for the agent to undermine and exploit complicated nonlinear functions of the accounting aggregates

valuing climate protection through willingness to pay for biomass ethanol abstract this study uses a multi part split sample contingent valuation method cvm and fair share fs survey to better understand the public s valuation of mitigating global climate change through its willingness to pay for biomass or cellulosic ethanol in addition to a basic cvm question a related scenario was developed that asked half of the survey respondents to state their fair share cost to lessen a potential food shortage in the next decade also through the expanded use of cellulosic ethanol three alternative biomass feedstocks were assessed farming residues forestry residues and paper mill wastes and municipal solid wastes overall a slightly larger proportion of respondents were wtp extra for cellulosic ethanol in the basic cvm scenario than in the fs scenario though no significant differences were found in the wtp for the different feedstocks bid curve lognormal regression results for the two models were similar supporting the idea that asking a fs rather than a conventional wtp question may be justifiable in some circumstances such as in cases of a national emergency

a continuous time version of the principal agent problem this paper describes a new continuous time principal agent model in which the output is a diffusion process with drift determined by the agent s unobserved effort the risk averse agent receives consumption continuously the optimal contract based on the agent s continuation value as a state variable is computed by a new method using a differential equation during employment the output path stochastically drives the agent s continuation value until it reaches a point that triggers retirement quitting replacement or promotion the paper explores how the dynamics of the agent s wages and effort as well as the optimal mix of short term and long term incentives depend on the contractual environment the understanding of dynamic incentives is central in economics how do companies motivate their workers through piece rates bonuses and promotions how is income inequality connected with productivity investment and economic growth how do financial contracts and capital structure give incentives to the managers of a corporation the methods and results of this paper provide important insights to many such questions this paper introduces a continuous time principal agent model that focuses on the dynamic properties of optimal incentive provision we identify factors that make the agent s wages increase or decrease over time we examine the degree to which current and future outcomes motivate the agent we provide conditions under which the agent eventually reaches retirement in the optimal contract we also investigate how the costs of creating incentives and the dynamic properties of the optimal contract depend on the contractual environment the agent s outside options the difficulty of replacing the agent and the opportunities for promotion our new dynamic insights are possible due to the technical advantages of continuous time methods over the traditional discrete time ones continuous time leads to a much simpler computational procedure to find the optimal contract by solving an ordinary differential equation this equation highlights the factors that determine optimal consumption and effort the dynamics of the agent s career path are naturally described by the drift and volatility of the agent s pay offs the geometry of solutions to the differential equation allows for easy comparisons to see how the agent s wages effort and incentives depend on the contractual environment finally continuous time highlights many essential features of the optimal contract including the agent s eventual retirement in our benchmark model a risk averse agent is tied to a risk neutral principal forever after employment starts the agent influences output by his continuous unobservable effort input the principal sees only the output a brownian motion with a drift that depends on the agent s effort the agent dislikes effort and enjoys consumption we assume that the agent s utility function has the income effect that is as the agent s income increases it becomes costlier to compensate him for the effort also we assume that the agent s utility of consumption is bounded from below

the theory of moral hazard and unobservable behaviour part i principal agent models are studied in which outcomes conditional on the agent s action are uncertain and the agent s behaviour therefore unobservable for a model with bounded agent s utility conditions are given under which the first best equilibrium can be approximated arbitrarily closely by contracts relating payment to observable outcomes for general models it is shown that the solution may not always be obtained by using the agent s first order conditions as constraint general conditions of lagrangean type are given for problems in which contracts are finite dimensional 1 the moral hazard situation

urban bias in price risk the geography of food price distributions in low income economies the geography of agricultural marketing has important implications for the stochastic distribution of agricultural commodity prices this article proposes that objective food price risk differs between rural and urban areas of infrastructure poor economies characterised by spatially concentrated patterns of foodgrains storage this difference implies an urban bias having adverse welfare effects for peasants who seasonally switch between net food seller and net food buyer positions empirical analysis of rice price data from madagascar suggests that price variability and skewness indeed differ between rural and urban areas in ways that adversely influence the relative welfare of rural peasants

test retest reliability of contingent valuation with independent sample pretest and posttest control groups test retest the standard method used to investigate reliability of contingent valuation is limited because when the time period between the two surveys is relatively short the study may exhibit testing recall conversely when the time between the two surveys increases there is an increased chance the true value will change the test retest design cannot isolate these effects independent pretest and posttest control groups allow testing of reliability even when recall occurs or the true value changes using this design we found ex post estimates of hicksian surplus are reliable regardless of whether respondents have direct experience with an activity

the complex dynamics of smallholder technology adoption the case of sri in madagascar this article explores the dynamics of smallholder technology adoption with particular reference to a high yielding low external input rice production method in madagascar we present a simple model of technology adoption by farm households in an environment of incomplete financial and land markets we then use a probit model and symmetrically censored least squares estimation of a dynamic tobit model to analyze the decisions to adopt expand and disadopt the method we find that seasonal liquidity constraints discourage adoption by poorer farmers learning effects both from extension agents and from other farmers exert significant influence over adoption decisions

a selectivity model of household food marketing behavior in sub saharan africa the agricultural household s discrete decision of whether to participate in coarse grain markets is separated here from the continuous decision of how much to sell or buy conditional on participation failure to participate in markets results from high fixed transactions costs a selectivity model endogenously switches households into alternative market participation states correcting for bias caused by the exclusion of unobservable variables affecting both discrete and continuous decisions improved market information increases the probability of participation by sellers while access to cereals processing technology increases quantities transacted by both sellers and buyers conditional on participation

test retest reliability of the contingent valuation method a comparison of general population and visitor responses the reliability of the contingent valuation method is evaluated by resurveying the same general households and visitors nine months after their original survey test retest correlations on willingness to pay are statistically significant and ranged from 422 for the general population sample to 782 for the visitor sample using a paired t test there was no statistical difference between an individual s first and second reported willingness to pay chow tests comparing the original and resurvey willingness to pay functions showed no statistical difference at the 01 level reported willingness to pay is reasonably stable over the time period surveyed

on repeated moral hazard with discounting in this paper we analyze optimal contracts in an infinitely repeated agency model in which both the principal and agent discount the future we show that there is a stationary representation of the optimal contract when the agent s conditional discounted expected utility is used as a state variable this representation reduces the multi period problem to a static variational problem which can be analyzed using standard variational techniques this reduction is used to obtain several properties of the contract

cereals market liberalization in mali abstract this paper analyzes the impact of the process of liberalization of cereal markets in mali most consumers including food deficient farmers and private grain traders have benefited from the liberalization efforts to tie the liberalization to a minimum support price for farmers failed because the state lacked the resources to guarantee the support price furthermore the ability of different types of farmers and traders to respond to opportunities created by the liberalization has varied widely depending on their access to productive resources improved technologies information and credit economy wide constraints such as the insecurity of contracts and liquidity constraints resulting from the failure of the government to pay salaries on time have further limited the impact of the liberalization

agricultural technology productivity and poverty in madagascar summary this paper uses a unique spatially explicit dataset to study the link between agricultural performance and rural poverty in madagascar we show that controlling for geographical and physical characteristics communes that have higher rates of adoption of improved agricultural technologies and consequently higher crop yields enjoy lower food prices higher real wages for unskilled workers and better welfare indicators the empirical evidence strongly favors support for improved agricultural production as an important part of any strategy to reduce the high poverty and food insecurity rates currently prevalent in rural madagascar

benefits of participating in contingent valuation mail surveys and their effects on respondent behavior a panel analysis abstract we investigated the fringe benefits of participating in contingent valuation mail surveys and their effects on respondents answers a two wave panel survey evaluating japan s anti global warming policies was conducted one sample was randomly assigned to either of two survey treatment groups with different survey loads factor analyses of answers distinguished the survey fringe benefit factor from the environmental concern factor the correlation between the two factors was smaller for the heavy load group than for the light load group estimations of structural equation models showed that survey participation became higher when the survey fringe benefit factor scored higher this tendency was found regardless of the survey load level structural equation models did not confirm a positive correlation between the survey fringe benefit factor and the consistency of wtp answers across survey waves however a logistic regression of the answers from the heavy load group revealed a positive correlation between the consistency of wtp answers and the level of perception of the survey as a good cause which was highly correlated to the fringe benefit factor in the previous factor analyses this positive relationship was not detected for the light load group

fairness stewardship and sustainable development abstract the welfare economic concept of fairness offers an attractive axiomatic foundation for the popular notion of stewardship fairness emphasizes the ex ante equal standing of all persons across and within generations this highlights the inextracability of poverty alleviation and environmental sustainability especially in the agrarian tropics where biodiversity loss deforestation and desertification are growing global concerns