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

market access well being and nutrition evidence from ethiopia summary we use a unique data source from a rural area in northwestern ethiopia to analyze the relationship between household individual well being nutrition and market access we find that households residing in relatively more remote areas consume substantially less than households nearer to the market they are more food insecure and their school enrollment rates are lower although their diets are also less diverse we find no significant differences in mother and child anthropometric measures part of the differences in well being that we do observe can be attributed to lower household agricultural production in remote areas nonetheless agricultural production differences alone do not account for all the differences in household consumption levels for remote households an additional contributing factor is the terms of trade for remote households that negatively affect both the size of the agricultural surplus that these households market and the quantity of food items that they purchase reducing transaction costs for remote households and facilitating migration could help equalize well being among more or less favored locations

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

optimal farm size in an uncertain land market the case of kyrgyz republic this article applies a real options model to the problem of land development making use of the 1998 2001 kyrgyz household budget survey we show that when the hypothesis of decreasing return to scale holds the relation between the threshold value of revenue per hectare and the amount of land cultivated is positive in addition the relation between the threshold and the amount of land owned is positive in the case of continuous supply of land and negative when there is discontinuous supply of land the direct consequence is that in the first case smaller farms will be more willing to rent land and exercise the option where in the second case larger farms will exercise first the results suggest three main conclusions i the combination of uncertainty and irreversibility is an important factor in land development decisions ii farmer behavior is consistent with the continuous profit maximization model and iii farming unit revenue tends to be positively related to farm size once uncertainty is properly accounted for

input subsidy programs in sub saharan africa a synthesis of recent evidence input subsidy programs have once again become a major plank of agricultural development strategies in africa ten african governments spend roughly us 1 billion annually on input subsidy programs isps amounting to 28 6 of their public expenditures on agriculture this article reviews the microlevel evidence on isps undertaken since the mid 2000s we examine the characteristics of subsidy beneficiaries crop response rates to fertilizer application and their influence on the performance of subsidy programs the impacts of subsidy programs on national fertilizer use and the development of commercial input distribution systems and finally the impact of isps on food price levels and poverty rates the weight of the evidence indicates that the costs of the programs generally outweigh their benefits findings from other developing areas with a higher proportion of crop area under irrigation and with lower fertilizer prices factors that should provide higher returns to fertilizer subsidies than in africa indicate that at least a partial reallocation of expenditures from fertilizer subsidies to r d and infrastructure would provide higher returns to agricultural growth and poverty reduction however because isps enable governments to demonstrate tangible support to constituents they are likely to remain on the african landscape for the foreseeable future hence the study identifies ways in which benefits can be enhanced through changes in implementation modalities and complementary investments within a holistic agricultural intensification strategy among the most important of these are efforts to reduce the crowding out of commercial fertilizer distribution systems and programs to improve soil fertility to enable farmers to use fertilizer more efficiently the challenges associated with achieving these gains are likely to be formidable

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

are nonconvexities important for understanding growth everyday experience and a simple logical argument show that nonconvexities are essential for understanding growth compared to previous statements of this well known argument the presentation here places more emphasis on the distinction between two of the fundamental attributes of any economic good rivalry and excludability it also emphasizes the difference between public goods and the technological advances that are fundamental to economic growth like public goods technological advances are rionrival goods hence they are inextricably linked to nonconvexities but in contrast to public goods which are nonexcludable technological advances generate benefits that are at least partially excludable hence innovations in the technology are for the most part privately provided this means that nonconvexities are relevant for goods that trade in private markets consequently an equilibrium with price taking in all markets cannot be sustained concluding remarks describe some of the recent equilibrium growth models that do not rely on price taking and highlight some of the implications of these models this abstract was borrowed from another version of this item

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 last mile s in modern input distribution pricing profitability and adoption increasing adoption of modern inputs remains one of the best hopes for greater agricultural production in developing countries based on unique data from northwestern ethiopia this study examines the last mile s from the input distribution center to the farmer in the chemical fertilizer and improved seed distribution system we find that increasing transaction and transportation costs over a 35 km distance along a route mainly accessible to only foot traffic lead to a 50 increase of the price of chemical fertilizer and to a 75 reduction in its use farmers who live about 10 km from the distribution center face per unit transaction and transportation costs as high as the costs needed to bring the fertilizer from the international port to the input distribution center about 1 000 km tackling the last mile s costs should thus be a priority to improve modern input adoption and use in these settings

policies to promote cereal intensification in ethiopia the search for appropriate public and private roles over the past decade policymakers have been searching for an appropriate blend of public and private sector roles to accelerate the intensification of food staple production smallholder commercialization and sustainable market development in sub saharan africa in ethiopia steps taken to liberalize markets in the 1990s and promote fertilizer and seed packages have yet to generate payoffs in terms of higher cereal yields lower food prices or reduced dependency on food aid this raises concern about the performance of the agricultural sector specifically in terms of the systems for providing improved seed fertilizer credit and extension services this paper examines the evolving roles of the public and private sectors in intensifying cereal production in ethiopia findings suggest that while ethiopia has an admirable record of supporting agriculture its state led policies has now outlived their usefulness these findings for ethiopia offer lessons that are potentially applicable to other sub saharan african countries facing similar challenges

adoption of interrelated agricultural innovations complementarity and the impacts of risk scale and credit the paper presents a model of farm decisions which arise when a farm is faced with two interrelated innovations the innovations are distinguished by their returns to scale and may be adopted individually it is shown that under conditions of uncertainty or a binding credit constraint the intuitive concept of innovations complementarity may be misleading and a more relevant definition of complementarity is derived the latter helps to explain why policies which enhance adoption of one innovation may discourage adoption of the other even when the two innovations seem to complement each other

will u s agriculture really benefit from global warming accounting for irrigation in the hedonic approach will u s agriculture really benefit from global warming accounting for irrigation in the hedonic approach wolfram schlenker w michael hanemann and anthony c fisher there has been a lively debate about the potential impact of global climate change on u s agriculture most of the early agro economic studies predict large damages see for example richard m adams 1989 harry m kaiser et al 1993 and adams et al 1995 in an innovative paper robert mendelsohn william d nordhaus and daigee shaw 1994 hereafter mns propose a new approach using the variation in temperature and precipitation across u s counties to estimate a reduced form hedonic equation with the value of farmland as the dependent variable a change in temperature and or precipitation is then associated with a change in farmland value which can be interpreted as the impact of climate change adams et al 1998 characterize the hedonic approach as a spatial analogue approach and acknowledge that the strength of the spatial analogue approach is that structural changes and farm responses are implicit in the analysis freeing the analyst from the burden of estimating the e ects of climate change on particular region speci c crops and farmer responses on the other hand one of the potential disadvantages of the hedonic approach is that it is a partial equilibrium analysis i e agricultural prices are assumed to remain constant 1 while year to year uctuations in annual weather conditions certainly have the potential to impact current commodity prices especially for crops produced only in a relatively localized area such as citrus fruits which are grown mainly in california and florida changes in long run weather patterns i e changes in climate might have a smaller e ect on commodity prices because of the greater potential for economic adaptation particularly shifts in growing regions 2 the hedonic approach as implemented by mns predicts that existing agricultural land on average might be more productive and hence result in bene ts for u s farmers 3 the hedonic approach has received considerable attention in our judgment in part because the conclusions are at variance with those of some other studies

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

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

building resilient health systems experimental evidence from sierra leone and the 2014 ebola outbreak this paper experimentally examines efforts aimed at improving health worker performance in the context of the 2014 15 west african ebola crisis roughly two years before the outbreak in sierra leone the study randomly assigned two accountability interventions to government run health clinics one focused on community monitoring and the other gave status awards to clinic staff the findings show that prior to the ebola crisis both interventions led to improvements in utilization of clinics patient satisfaction with the health system and child health outcomes during the crisis the interventions led to higher reported ebola cases as well as lower mortality from ebola particularly in areas with community monitoring clinics the paper explores the potential mechanisms and the findings provide evidence consistent with the following mechanism by building trust and confidence in health workers and improving the perceived quality of care provided by clinics prior to the outbreak the interventions encouraged patients to report and receive treatment the results suggest that accountability interventions not only have the power to improve health systems during normal times but also can make health systems resilient to crises that may emerge over the longer run

on modeling and interpreting the economics of catastrophic climate change with climate change as prototype example this paper analyzes the implications of structural uncertainty for the economics of low probability high impact catastrophes even when updated by bayesian learning uncertain structural parameters induce a critical tail fattening of posterior predictive distributions such fattened tails have strong im plications for situations like climate change where a catastrophe is theoretically possible because prior knowledge cannot place sufficiently narrow bounds on overall damages this paper shows that the economic consequences of fat tailed structural uncertainty along with unsureness about high temperature damages can readily outweigh the effects of discounting in climate change policy analysis

reliability of recall in agricultural data despite the importance of agriculture to economic development and a vast accompanying literature on the subject little research has been done on the quality of the underlying data due to survey logistics agricultural data are usually collected by asking respondents to recall the details of events occurring during past agricultural seasons that took place a number of months prior to the interview this gap can lead to recall bias in reported data on agricultural activities the problem is further complicated when interviews are conducted over the course of several months thus leading to recall of variable length to test for such recall bias the length of time between harvest and interview is examined for three african countries with respect to several common agricultural input and harvest measures the analysis shows little evidence of recall bias impacting data quality there is some indication that more salient events are less subject to recall decay overall the results allay some concerns about the quality of some types of agricultural data collected through recall over lengthy periods

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

structural transformation of cereal markets in ethiopia abstractwe study cereal markets in ethiopia over the last decade a period that has been characterised by important local changes including strong economic growth urbanisation improved road and communication infrastructure and higher adoption of modern inputs in agriculture these changes are associated with better spatial price integration as well as with significant declines in real price differences between supplying and receiving markets and in cereal milling and retail margins in short important improvements have occurred in ethiopia s cereal marketing system this is especially important because dysfunctional cereal markets were previously identified as an important cause of food insecurity in the country

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

does supervision matter some hypothesis tests using indian farm level data abstract a model is developed and estimated to test for heterogeneity of family and hired labor in agricultural production and to estimate the impact of employer supervision on the productivity of hired labor plot level data are used from a rice growing village in semi arid tropical india the hypothesis that family and hired labor are homogeneous inputs was rejected results indicate that family member supervision is required to increase hired labor productivity output loss attributable to operating at reduced supervision intensity was greater than 10 on over 40 of the plots

impacts of land certification on tenure security investment and land market participation evidence from ethiopia this brief summarizes the results of a gender impact evaluation study entitled impacts of land certification on tenure security investment and land market participation evidence from ethiopia conducted between 2006 and 2011 in ethiopia the study observed the impact of land registration on tenure security land related investment and rental market participation using 900 randomly selected households and 4000 plots cultivated by the households on the household and land plots level certification resulted in significant reduction of tenure insecurity and an increase in land related investment the propensity to invest in water conservation increased between 20 and 30 percent from panel estimates the increased investment appears to be sustained over the long term the propensity to rent land increases by 9 to 13 percent the titling had significant positive impacts on the rate at which female headed households rented their land funding for the study derived from the gender action plan global land tools network and norwegian environmentally and socially sustainable development essd trust fund

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

toward a green revolution in africa what would it achieve and what would it require the current global food crisis has reemphasized the costliness of africa s failure to achieve food security and poverty reduction the instrument by which other more successful developing countries achieved these outcomes was a green revolution in agriculture while previous research has provided largely discursive appraisals of the viability of an african green revolution this article adopts a more rigorous methodology to address that question first an economy wide multimarket model augmented with existing poverty growth elasticities is developed to assess the likely impacts of a rapid acceleration in food production of the kind witnessed in previous green revolutions on food prices consumption and demand farmer revenue and poverty our results suggest that a rapid growth in staple production together with more integrated regional markets would reduce food prices by roughly 20 40 for consumers and 10 20 for producers among the major crops this translates into a large rise in farm revenues annual agricultural growth rates of 6 5 or higher broader income growth and food security and over 70 million africans being lifted out of poverty the article concludes by emphasizing the kinds of fundamental policy actions and resources that would be required for achieving these outcomes

how productive is infrastructure a new approach and evidence from rural india there have been competing arguments about the effect of public infrastructure on productivity level based and debate based regressions often lead to different estimates to help reconcile this difference this article applies the gmm method to first test for causality to check for length of lagged relationships and the existence of reverse causality before specifying a final model and deciding the estimation procedure this approach is illustrated using a panel data set for india the results show that infrastructure development in india is productive providing supporting evidence to reverse the trend of declining investment in rural infrastructure

the dynamics of agricultural biotechnology adoption lessons from series rbst use in wisconsin 1994 2001 this article exploits panel data from wisconsin dairy farmers to examine the dynamics of recombinant bovine somatotropin rbst adoption and to identify the characteristics that distinguish among nonadopters disadopters and early and late adopters panel methods are used to control for omitted variables and endogenous regressors that call into question coefficient estimates derived from cross section adoption models the results however confirm previous findings that larger farms with complementary feeding technologies are more likely to adopt rbst nonadopters appear quite unlikely to become adopters and rbst adoption will remain at rather moderate levels in wisconsin

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 global bio economy throughout history agriculture and natural resources have been used for the production of food feed fibre fuel and environmental goods recent developments in demand both in terms of quantity and quality technology and traditional energy and chemistry markets have reinforced the demand for nonfood applications these developments in combination with increased consumer demands for various food characteristics have led to a rapidly growing and globally integrated bio economy this article introduces and summarizes the plenary papers on the opportunities and challenges for the bio economy that were presented at the 28th triennial conference of the international association of agricultural economists iaae in brazil the following aspects of the bio economy are covered finance volatility poverty conflict productivity investment resource constraints and governance

productivity technology and economic growth what is the relationship the relationship between productivity technology and economic growth has been debated extensively in the endogenous growth growth accounting new economy and policy literature this paper briefly surveys the literature on total factor productivity tfp calculations the various techniques and problems associated with it we argue that tfp is not a measure of technological change and only under ideal conditions does it measure the supernormal profits associated with technological change the critical driving force of economic growth is not the super normal profits that technological change generates but rather the continuous creation of opportunities for further technological development six illustrations of when tfp fails to correctly measure these super normal profits are provided a version carlaw and lipsey s 2003b model of endogenous general purpose technology driven growth is then utilized to make some progress toward answering prescott s 1998 call for a theory of tfp the model is used to simulate artificial data and connect theoretical assumptions of returns to scale and resource costs to the conditions under which tfp miss measures the actual growth of technological knowledge

adapting natural resource enterprises under global warming in south america a mixed logit analysis this paper develops an integrated model of adapting natural resource intensive enterprises in latin america to future climate changes based on about 2 000 rural household surveys we model six specialized and diversified resource enterprises across seventeen land covers we estimate random coefficients of climatic parameters with a mixed logit model by 2020 under a hotter and drier ccc scenario crops only and cropforests enterprises are predicted to fall by 6 2 and 0 6 respectively offsetting these losses livestock only enterprise increases by 5 5 and crops livestock forests enterprise increases by 0 7 these changes magnify over time through 2060 by which time the crops livestock enterprise increases by more than 5 adaptation measures should be designed in a manner that captures the unique characteristics of latin american ecosystems

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

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

debt poverty and resource management in a rural smallholder economy this paper develops a model to capture the key features of poverty credit constraints and resource management faced by poor rural households we assume that due to the existence of asymmetric information and moral hazard the household faces an increasing cost of credit as its debt equity ratio rises a household exploiting a natural resource may fall into a poverty trap but only if it is unable to afford the increasing borrowing costs implied by increasing debt to allow it to avoid such a trap or if it discounts future utility so much that a balanced growth path cannot be financed at any level of long run borrowing in contrast along an optimal balanced growth path the household s asset wealth purchased inputs resource stock and consumption increase at the same constant rate however over the long run there may be carrying capacity limits that prevent the resource from improving further the household may then direct its savings to accumulating financial assets and eventually under certain conditions may become a net creditor with resource exploitation becoming a less and less important source of its income

inputs incentives and complementarities in education experimental evidence from tanzania we present results from a large scale randomized experiment across 350 schools in tanzania that studied the impact of providing schools with i unconditional grants ii teacher incentives based on student performance and iii both of the above after two years we find i no impact on student test scores from providing school grants ii some evidence of positive effects from teacher incentives and iii significant positive effects from providing both programs most important we find strong evidence of complementarities between the programs with the effect of joint provision being significantly greater than the sum of the individual effects our results suggest that combining spending on school inputs the default policy with improved teacher incentives could substantially increase the cost effectiveness of public spending on education

why have some indian states done better than others at reducing rural poverty the unevenness of the rise in rural living standards in the various states of india since the 1950s allowed the authors to study the causes of poverty they modeled the evolution of average consumption and various poverty measures using pooled state level data for 1957 91 they found that poverty was reduced by higher agricultural yields above trend growth in nonfarm output and lower inflation rates but these factors only partly explain relative success and failure in reducing poverty initial conditions also mattered states that started the period with better infrastructure and human resources with more intense irrigation greater literacy and lower infant mortality rates had significantly greater long term rates of consumption growth and poverty reduction by and large the same variables that promoted growth in average consumption also helped reduce poverty the effects on poverty measures were partly redistributive in nature after controlling for inflation the authors found that some of the factors that helped reduce absolute poverty also improved distribution and none of the factors that reduced absolute poverty had adverse impacts on distribution in other words there was no sign of tradeoffs between growth and pro poor distribution

neighbors and extension agents in ethiopia who matters more for technology adoption improving agricultural productivity is seen as vital to economic growth in poor countries particularly in sub saharan africa where productivity growth has lagged behind that of other continents the focus has therefore been on new technologies particularly the adoption and diffusion of improved seed varieties and the increased use of fertiliser supported by investments in effective extension services it is important to understand how these new technologies spread and the effectiveness of extension services in this process

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

valuing the impact of large scale ecological change in a market the effect of climate change this paper establishes a methodology for valuing the impact of large scale ecological changes in a market given the large capital stocks inherent in most ecological systems the dynamic nature of most ecological change and the dynamic response of markets it is critical to build dynamic models to capture the resulting effects this paper demonstrates how to construct such a model using the impacts of climate change on u s timber markets as an example across a wide range of scenarios and models warming is predicted to expand timber supplies and thus benefit u s timber markets copyright 1998 by american economic association

the impact of global warming on agriculture reply in our paper with daigee shaw mendelsohn et al 1994 henceforth mns we developed a new approach to measuring the impact of global warming on agriculture we call this approach ricardian because it relies upon standard rent theory as a way of identifying the impact of changes on net economic welfare we compared the ricardian approach with the traditional production function approach which uses agricultural production functions but has great difficulty identifying all the other adjustments that farmers make in response to changing external conditions the ricardian approach is particularly well suited to a tremendously heterogeneous sector because it can rely upon reduced form estimation and does not require the impossible task of constructing structural models of hundreds of crops in thousands of locations estimating the model using cross sectional data on climate farm land prices and other economic and geophysical data for almost 3 000 counties in the united states the ricardian approach shows a significantly lower estimated impact of global warming than the traditional productionfunction approach indeed our preferred statistical approach showed modest benefits of climate change in his comment on mns in this issue of the review william r cline 1996 raises three concerns first he notes that the analysis assumes that output prices remain constant second he asserts that the analysis assumes that the supply of water for irrigation is perfectly elastic third he calls for testing the results of the model on alternative climate scenarios from general circulation models gcm s his first and third points are useful additions while the second is incorrect our ricardian approach assumes that the existing pattern of agricultural land rents and land prices reflects the long run equilibrium economic effect of climate and other geophysical and economic variables standard economic reasoning shows that by calculating the estimated effects of perturbing the climatic variables we can project the impact of climate change on economic welfare we do so in a partial equilibrium approach which assumes that output prices are invariant to the climate and cline is correct to point out that this might lead to biased estimates because the partialequilibrium estimates tend to underestimate damages and overestimate benefits in fact the bias is small given standard parameters for agricultural demand and supply functions we illustrate this point using linear supply and demand functions for agricultural crops let demand be given by qd ao a1p while supply is q po pi p where q and p are output and price and ai and i are parameters in equilibrium at the old climate market outcomes are qo and po now suppose that global warming contracts supply so that

the evolving role of agriculture in poverty reduction an empirical perspective abstract the role of agriculture in development remains much debated this paper takes an empirical perspective and focuses on poverty as opposed to growth alone the contribution of a sector to poverty reduction is shown to depend on its own growth performance its indirect impact on growth in other sectors the extent to which poor people participate in the sector and the size of the sector in the overall economy bringing together these different effects using cross country econometric evidence indicates that agriculture is significantly more effective in reducing poverty among the poorest of the poor as reflected in the 1 day squared poverty gap it is also up to 3 2 times better at reducing 1 day headcount poverty in low income and resource rich countries including those in sub saharan africa at least when societies are not fundamentally unequal however when it comes to the better off poor reflected in the 2 day measure non agriculture has the edge these results are driven by the much larger participation of poorer households in growth from agriculture and the lower poverty reducing effect of non agriculture in the presence of extractive industries

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

land pressures the evolution of farming systems and development strategies in africa a synthesis abstract evidence assembled in this special issue of food policy shows that rising rural population densities in parts of africa are profoundly affecting farming systems and the region s economies in ways that are underappreciated in current discourse on african development issues this study synthesizes how people markets and governments are responding to rising land pressures in africa drawing on key findings from the various contributions in this special issue the papers herein revisit the issue of boserupian agricultural intensification as an important response to land constraints but they also go further than boserup and her followers to explore broader responses to land constraints including non farm diversification migration and reduced fertility rates agricultural and rural development strategies in the region will need to more fully anticipate the implications of africa s rapidly changing land and demographic situation and the immense challenges that mounting land pressures pose in the context of current evidence of unsustainable agricultural intensification a rapidly rising labor force associated with the region s current demographic conditions and limited nonfarm job creation these challenges are manageable but will require explicit policy actions to address the unique development challenges in densely populated rural areas

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

upping the ante the equilibrium effects of unconditional grants to private schools this paper tests for financial constraints as a market failure in education in a low income country in an experimental setup unconditional cash grants are allocated to one private school or all private schools in a village enrollment increases in both treatments accompanied by infrastructure investments however test scores and fees only increase in the setting of all private schools along with higher teacher wages this differential impact follows from a canonical oligopoly model with capacity constraints and endogenous quality greater financial saturation crowds in quality investments the findings of higher social surplus in the setting of all private schools but greater private returns in the setting of one private school underscore the importance of leveraging market structure in designing educational subsidies

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

is an integrated farm more resilient against climate change a micro econometric analysis of portfolio diversification in african agriculture abstract this paper examines whether an integrated farm that owns both crops and livestock is more resilient under global warming than a specialized farm in crops using around 9000 farm surveys across africa we explore how farmers choose one of the farm types and how the net revenue of each type varies across the range of climate in africa the results indicate that an integrated farm increases in number while a specialized farm decreases across africa under climate predictions for 2060 the relative profitability of each system against each other also changes an integrated farm becomes relatively more profitable over specialized farms half a century from now the impacts of climate change on integrated farms range from 9 loss to 27 gain depending on climate scenarios behavioral models can capture portfolio diversification benefits that agro economic models cannot measure

modeling multiple adoption decisions in a joint framework a multinomial probit mnp model is applied to the modeling of adoption decisions by farmers facing multiple technologies which can be adopted in various combinations this model allows for full investigation of the interactions between decisions to adopt or not adopt several technologies estimation is carried out in a bayesian framework employing gibbs sampling to circumvent past difficulties encountered in maximum likelihood estimation of the mnp model the model is estimated for a sample of u s apple growers with four possible sustainable production technology bundles the results show that adoption decisions are most significantly influenced by off farm labor supply

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

rural market imperfections and the farm size productivity relationship evidence from pakistan the subject of this article is the relationships between farm size and productivity and between farm size and profitability in the developing countries the recent controversies over the inverse size output relationship are reviewed and a framework is provided that explains the inverse relationship based on plausible assumptions about imperfections in the markets for labor land credit and risk from this framework a set of testable hypotheses are derived the hypotheses are tested on recent farm level panel data from pakistan a strong inverse relationship between farm size and yield is present in the sample even when household fixed effects are used to account for unobserved heterogeneity moreover the suggested market imperfections framework is consistent with the data

consumption risk technology adoption and poverty traps evidence from ethiopia much has been written on the determinants of input and technology adoption in agriculture with issues such as input availability knowledge and education risk preferences profitability and credit constraints receiving much attention this paper focuses on a factor that has been less well documented the differential ability of households to take on risky production technologies for fear of the welfare consequences if shocks result in poor harvests building on an explicit model this is explored in panel data for ethiopia historical rainfall distributions are used to identify the counterfactual consumption risk controlling for unobserved household and time varying village characteristics it emerges that not just ex ante credit constraints but also the possibly low consumption outcomes when harvests fail discourage the application of fertilizer the lack of insurance causes inefficiency in production choices