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

forecasting day ahead electricity load using a multiple equation time series approach the quality of short term electricity load forecasting is crucial to the operation and trading activities of market participants in an electricity market in this paper it is shown that a multiple equation time series model which is estimated by repeated application of ordinary least squares has the potential to match or even outperform more complex nonlinear and nonparametric forecasting models the key ingredient of the success of this simple model is the effective use of lagged information by allowing for interaction between seasonal patterns and intra day dependencies although the model is built using data for the queensland region of australia the method is completely generic and applicable to any load forecasting problem the model s forecasting ability is assessed by means of the mean absolute percentage error mape for day ahead forecast the mape returned by the model over a period of 11 years is an impressive 1 36 the forecast accuracy of the model is compared with a number of benchmarks including three popular alternatives and one industrial standard reported by the australia energy market operator aemo the performance of the model developed in this paper is superior to all benchmarks and outperforms the aemo forecasts by about a third in terms of the mape criterion

why has u s inflation become harder to forecast we examine whether the u s rate of price inflation has become harder to forecast and to the extent that it has what changes in the inflation process have made it so the main finding is that the univariate inflation process is well described by an unobserved component trend cycle model with stochastic volatility or equivalently an integrated moving average process with time varying parameters this model explains a variety of recent univariate inflation forecasting puzzles and begins to explain some multivariate inflation forecasting puzzles as well

dynamics of smallholder participation in horticultural export chains evidence from ecuador we study the dynamics of smallholder participation in export value chains focusing on the example of small scale broccoli producers in the highlands of ecuador combining cross sectional data from a household survey with 11 year longitudinal data on export market transactions we explain the hazards of dropping out of a high value export chain we apply a multispell cox duration model that allows us to consider multiple entries and exits from the supply chain we also provide evidence on the welfare impacts associated with participation the results suggest that small scale farmers exit from the export sector is accelerated by high transaction risks experienced in the past while we find no particular evidence for the exclusion of small scale farmers from the export sector we do find that poorer households and female headed households tend to drop out faster especially as long as the sector is still prospering finally when considering welfare effects we do not find evidence that participation translates into tangible benefits for broccoli farmers we discuss some measures that could help improve the long term sustainability of smallholder integration in high value chains

short term load forecasting based on a semi parametric additive model short term load forecasting is an essential instrument in power system planning operation and control many operating decisions are based on load forecasts such as dispatch scheduling of generating capacity reliability analysis and maintenance planning for the generators overestimation of electricity demand will cause a conservative operation which leads to the start up of too many units or excessive energy purchase thereby supplying an unnecessary level of reserve on the other hand underestimation may result in a risky operation with insufficient preparation of spinning reserve causing the system to operate in a vulnerable region to the disturbance in this paper semi parametric additive models are proposed to estimate the relationships between demand and the driver variables specifically the inputs for these models are calendar variables lagged actual demand observations and historical and forecast temperature traces for one or more sites in the target power system in addition to point forecasts prediction intervals are also estimated using a modified bootstrap method suitable for the complex seasonality seen in electricity demand data the proposed methodology has been used to forecast the half hourly electricity demand for up to seven days ahead for power systems in the australian national electricity market the performance of the methodology is validated via out of sample experiments with real data from the power system as well as through on site implementation by the system operator

agricultural household models extensions applications and policy this book presents the basic model of an agricultural household that underlies most of the case studies undertaken so far the model assumes that households are price takers and is therefore recursive the decisions modeled include those affecting production and the demand for inputs and those affecting consumption and the supply of labor comparative results on selected elasticities are presented for a number of economies the empirical significance of the approach is demonstrated in a comparison of models that treat production and consumption decisions separately and those in which the decisionmaking process is recursive the book summarizes the implications of agricultural pricing policy for the welfare of farm households marketed surplus the demand for nonagricultural goods and services the rural labor market budget revenues and foreign exchange earnings in addition it is shown that the basic model can be extended in order to explore the effects of government policy on crop composition nutritional status health saving and investment and to provide a more comprehensive analysis of the effects on budget revenues and foreign exchange earnings methodological topics primarily the data requirements of the basic model and its extensions along with aggregation market interaction uncertainty and market imperfections are discussed the most important methodological issues the question of the recursive property of these models is also discussed

the economics of poverty traps and persistent poverty an asset based approach abstract longitudinal data on household living standards open the way to a deeper analysis of the nature and extent of poverty while a number of studies have exploited this type of data to distinguish transitory from more chronic forms of income or expenditure poverty this paper develops an asset based approach to poverty analysis that makes it possible to distinguish deep rooted persistent structural poverty from poverty that passes naturally with time due to systemic growth processes drawing on the economic theory of poverty traps and bifurcated accumulation strategies this paper briefly discusses some feasible estimation strategies for empirically identifying poverty traps and long term persistent structural poverty as well as relevant extensions of the popular foster greer thorbecke class of poverty measures the paper closes with reflections on how asset based poverty can be used to underwrite the design of persistent poverty reduction strategies

probabilistic forecasts of the magnitude and timing of peak electricity demand adequate capacity planning requires accurate forecasts of the future magnitude and timing of peak electricity demand electricity demand is affected by the day of the week seasonal variations holiday periods feast days and the weather a model that provides probabilistic forecasts of both magnitude and timing for lead times of one year is presented this model is capable of capturing the main sources of variation in demand and uses simulated weather time series including temperature wind speed and luminosity for producing probabilistic forecasts of future peak demand having access to such probabilistic forecasts provides a means of assessing the uncertainty in the forecasts and can lead to improved decision making and better risk management

house prices home equity based borrowing and the u s household leverage crisis us household leverage sharply increased in the years preceding the 2007 eco nomic recession the top panel of figure 1 shows the steady rise in household debt since 1975 which accelerated beginning in 2002 in just five years the household sector doubled its debt balance in comparison the contemporaneous increase in corporate debt was modest the middle panel shows that the increase in household debt from 2002 to 2007 translated into a striking rise in household leverage as mea sured by the debt to income ratio during the same time period corporate leverage declined the dramatic absolute and relative rise in us household leverage from 2002 to 2007 is unprecedented compared to the last 25 years one reason for the rapid expansion in household leverage during this period is that mortgage credit became more easily available to new home buyers mian and sufi 2009 strong house price appreciation from 2002 to 2006 however which may have been fueled by the availability of mortgage credit to a riskier set of new home buyers could also have had an important feedback effect on household lever age through existing homeowners given that 65 percent of us households already owned their primary residence before the acceleration in house prices the feedback from house prices to borrowing may be an important source of the rapid rise in household leverage that preceded the economic downturn our central goals in this study are to estimate how homeowner borrowing responded to the increase in house prices and to identify which homeowners responded most aggressively we examine this home equity based borrowing channel using a dataset consisting of anonymous individual credit files of a national consumer credit bureau agency we follow a random sample of over 74 000 us homeowners who owned their homes as of 1997 at an annual frequency from the end of 1997 until the end of 2008 the bottom panel of figure 1 plots the growth in debt of 1997 homeowners over time and shows that existing homeowners borrow significantly more debt as their house prices appreciate from 2002 to 2006 while the aggregate trend is suggestive

small farmers and big retail trade offs of supplying supermarkets in nicaragua summary in nicaragua and elsewhere in central america small scale farmers are weighing the risks of entering into contracts with supermarket chains we use unique data from cooperatives supplying supermarkets to study the effect of supply agreements on producers mean output prices and price stability we find that prices paid by the domestic retail chain approximate the traditional market in mean and variance while mean prices paid by walmart are significantly lower than the traditional market however the walmart contract is found to systematically reduce price volatility we find some evidence however that farmers may be paying too much for this contractual insurance against price variation

long term forecasts for energy commodities price what the experts think the ability to forecast energy prices in the long term is important for a wide range of reasons from the formulation of countries energy and transportation policies to the defensive strategies of nations to investment decisions within the private sector despite the importance of these predictions however forecasters and market pundits face a difficult challenge when trying to forecast over the long term while statistical models can credibly rely on assumptions about the relationship between variables in the short term they are frequently less reliable in the long term as political and technological transformations profoundly change how the economy works over time towards improving long term predictions for energy commodities this paper uses the elicitation and aggregation of experts beliefs to put forward forecasts for crude oil and natural gas prices by incentivizing experts to tell the truth and minimising their own biases through the application of the bayesian truth serum with this approach we generated both short term and long term forecasts and used the short term forecast to validate the quality of the experts predictions

estimating labor supply and production decisions of self employed farm producers abstract this paper proposes a model oriented towards integrating farm households production and consumption decisions into a unified theoretical and econometric framework it is argued that in contrast with other forms of economic organization farm households utility and profit maximization decisions are not likely to be independent econometric estimation of a farm household model using canadian data suggests that utility and profit maximizing decisions are not indeed independent and moreover that there are significant gains in explanatory power and efficiency by estimating the consumption and production equations jointly

adoption of agricultural innovations in developing countries a survey this paper reviews various studies which have provided a description and possible explanation to patterns of innovation adoption in the agricultural sector the survey points out that the tendency of many studies to consider innovation adoption in dichotomous terms adoption nonadoption may not be appropriate in many cases where the actual decisions are defined over a more continuous range more attention needs to be given to the socio cultural and institutional environment in area studies so that their interrelation with economic factors affecting adoption can be inferred the presence of several interrelated innovations is another aspect that needs to be considered more carefully in future research since a number of simultaneous decisions may be involved furthermore the possibility of regular sequential patterns in adopting components of a new technological package should be specifically addressed in future studies finally the impact of differential adoption rates on land holding distribution merits attention in future research

access to capital and its impact on agrarian structure and productivity in kenya access to capital and its distribution across agents can profoundly shape the structure and performance of an agrarian market economy it is conceptually useful to distinguish between ex ante and ex post capital access ex ante capital access denotes the ability of agents to finance production costs e g labor and purchased inputs costs which must be paid ex ante that is prior to the actual realization of production ex post capital access that is access to capital after the realization of the production process is of particular importance as an insurance substitute in low income agrarian economies where contingency markets are imperfect buoyant ex post capital access would permit an individual to stabilize consumption year to year even as production fluctuates annually a number of theoretical models have ex

cash crop production food price volatility and rural market integration in the third world large farmers in the third world often devote to cash crops a larger share of their land than do small farmers this paper suggests a possible explanation even in the presence of food markets third world farmers food security is best assured by food self sufficiency a model of crop portfolio choice under multivariate risk is used to show that reasonable assumptions regarding risk and preferences reproduce the observed pattern simulations further indicate that food market integration reduces the need for food self sufficiency policy implications are drawn regarding domestic trade liberalization and agricultural technology

short term load forecasting methods an evaluation based on european data this paper uses intraday electricity demand data from ten european countries as the basis of an empirical comparison of univariate methods for prediction up to a day ahead a notable feature of the time series is the presence of both an in traweek and an intraday seasonal cycle the forecasting methods considered in the study include arima modeling periodic ar modeling an extension for double seasonality of holt winters exponential smoothing a recently proposed alternative exponential smoothing formulation and a method based on the principal component analysis pca of the daily demand profiles our results show a similar ranking of methods across the 10 load series the results were disappointing for the new alternative exponential smoothing method and for the periodic ar model the arima and pca methods performed well but the method that consistently performed the best was the double seasonal holt winters exponential smoothing method

on the market impact of wind energy forecasts this paper presents an analysis of how day ahead electricity spot prices are affected by day ahead wind power forecasts demonstration of this relationship is given as a test case for the western danish price area of the nord pool s elspot market impact on the average price behaviour is investigated as well as that on the distributional properties of the price by using a non parametric regression model to assess the effects of wind power forecasts on the average behaviour the non linearities and time variations in the relationship are captured well and the effects are shown to be quite substantial furthermore by evaluating the distributional properties of the spot prices under different scenarios the impact of the wind power forecasts on the price distribution is proved to be considerable the conditional price distribution is moreover shown to be non gaussian this implies that forecasting models for electricity spot prices for which parameters are estimated by a least squares techniques will not have gaussian residuals hence the widespread assumption of gaussian residuals from electricity spot price models is shown to be inadequate for these model types the revealed effects are likely to be observable and qualitatively similar in other day ahead electricity markets significantly penetrated by wind power

house prices and credit constraints making sense of the us experience most us house price models break down in the mid 2000s due to the omission of exogenous changes in mortgage credit supply associated with the sub prime mortgage boom from house price to rent ratio and inverted housing demand models previous models lack data on credit constraints facing first time home buyers incorporating a measure of credit conditions the cyclically adjusted loan to value ratio for first time buyers into house price to rent ratio models yields stable long run relationships more precisely estimated effects reasonable speeds of adjustment and improved model fits

the impact of intraday markets on the market value of flexibility decomposing effects on profile and the imbalance costs abstract an increasing share of variable renewable energy sources vres basically affects the electricity price formation in two ways 1 the so called merit order effect tends to lower the base price level and challenges conventional plants to remain profitable 2 due to the variable nature of renewable energy infeed the short term demand for flexibility increases and changes the volatility of electricity prices the more variable prices offer opportunities for controllable electricity producers ceps who provide up and down ramping flexibility to increase their revenues in contrast the vres with high degrees of simultaneity tend to pay for this flexibility in the electricity spot market to reduce their imbalance exposure the intraday market idm for electricity has gained importance for the market value of different technologies lately and continues to expand due to the increasing efforts to balance within day deviation from day ahead schedules this article presents a combination and extension of two existing models to capture the peculiarities of the intraday price formation and to analyze the impact of the idm on the market value of vres and ceps doing so the paper suggests an adjustment of the classical market value factor metric and to go beyond classical day ahead market dam information the article shows that market value factors mvfs can be stabilized if the idm delivers market based price signals for the costs of flexibility that are sufficient to activate flexibilities prior to the usually more expensive imbalance mechanism ibm yet the mvfs from single vre technologies will worsen if their market share is high enough to outweigh forecast errors from other technologies and if they become a permanent price maker in the idm and the ibm

deutsche mark dollar volatility intraday activity patterns macroeconomic announcements and longer run dependencies this paper provides a detailed characterization of the volatility in the deutsche mark dollar foreign exchange market using an annual sample of five minute returns the approach captures the intraday activity patterns the macroeconomic announcements and the volatility persistence arch known from daily returns the different features are separately quantified and shown to account for a substantial fraction of return variability both at the intraday and daily level the implications of the results for the interpretation of the fundamental driving forces behind the volatility process is also discussed the efficient market hypothesis contends that financial asset prices provide rational assessments of fundamental values and future payoffs by implication price changes should reflect the arrival and processing of all relevant new information however the proportion of return variability that can be ascribed to public news announcements is low for example cutler poterba and summers 1989 find that even the largest daily price changes in the stock market generally cannot be associated with any significant economic news 1 moreover proxies for the flow of public information e g the number of news items released by reuter s news service berry and hiowe 1994 or dow jones company mitchell and mulherin 1994 explain little of the overall variation thus if private information is ruled out proponents of rational price formation have to assert the existence of important news items

forecasting system imbalance volumes in competitive electricity markets forecasting in power systems has been made considerably more complex by the introduction of competitive electricity markets furthermore new variables need to be predicted by various market participants this paper shows how a new methodology that combines classical and data mining techniques can be used to forecast the system imbalance volume a key variable for the system operator in the market of england and wales under the new electricity trading arrangements neta

peasant household behaviour with missing markets some paradoxes explained a model of peasant household behavior under varying degrees of household specific food and labor market failures is constructed to show that these structural features can explain several well known patterns of peasant response which have often been attributed to peculiar motives presumed specific to peasants the model explains sluggish response to cash crops prices and high instability in perceived food and labor scarcities the key role of manufactured consumer goods prices in stimulating peasants effort in cash crops production the effectiveness of taxation as opposed to incentives in stimulating cash crops production and the key role of technological change in food production to enhance cash crop production results are obtained analytically in the case of one market failure and by numerical simulation with more than one

impacts of supermarkets on farm household nutrition in kenya summary many developing countries experience a food system transformation with a rapid growth of supermarkets we analyze impacts of supermarkets on farm household nutrition with survey data from kenya participation in supermarket channels is associated with significantly higher calorie vitamin a iron and zinc consumption we use simultaneous equation models to analyze impact pathways supermarket supplying households have higher incomes a higher share of land under vegetables and a higher likelihood of male control of revenues furthermore income and the share of land under vegetables have positive impacts while male control of revenues has negative impacts on dietary quality policy and further research implications are discussed

conference on housing stability and the macroeconomy international perspectives this article provides an introduction to the jmcb special issue on housing bubbles the global financial crisis and the ensuing recessions in countries that experienced housing busts we focus on five themes that are important for policymakers and researchers alike the domestic and international factors driving housing booms and busts the relevance of the housing sector for the real economy how monetary policy should react to housing booms and busts how housing and mortgage finance reform could affect financial stability and the broad lessons learned for macroeconomics and macroprudential policy

supermarkets wholesalers and tomato growers in guatemala the article shows the asset related determinants and the impacts of the participation of small farmers in supermarkets versus traditional market channels in guatemala compared to farmers selling only to the traditional market channels farmers selling to supermarket channels are larger but are in the upper tier of the small farmer category have more capital and are much more specialized in commercial horticulture in general and in tomatoes in particular while they have higher yields they also have higher input use including use of chemicals in fact they severely overuse pesticides and fungicides moreover these greater input expenditures mean that their profit rates are roughly similar to those of farmers in the traditional market channel supermarket channel farmers prefer the more demanding wholesale supermarket channel because it offers lower risks and lower transaction costs to market a variety of quality grades of tomatoes all year long in turn the supermarkets who do not buy direct but rather source from a few specialized dedicated wholesalers rely on this year round supply lower transaction costs and consistency of quality

inflation hedging properties of regional chinese real estate market evidence from 35 cities in china the housing markets in china have been gaining considerable interest from investors but the inflation hedging characteristics of housing remain ambiguous based on chinese city level data this study evaluates different inflation hedging properties in eastern middle and western real estate markets using panel vector autoregressive pvar models findings suggest middle real estate markets afford the best hedging opportunities for expected inflation which is robust considering housing market heterogeneity financial crisis and the 2010 purchase restriction order moreover hedging efficacy of anticipated inflation differs between markets with low and high supply demand ratio

classification of future electricity market prices forecasting short term electricity market prices has been the focus of several studies in recent years although various approaches have been examined achieving sufficiently low forecasting errors has not been always possible however certain applications such as demand side management do not require exact values for future prices but utilize specific price thresholds as the basis for making short term scheduling decisions in this paper classification of future electricity market prices with respect to pre specified price thresholds is introduced two alternative models based on support vector machines are proposed in a multi class multi step ahead price classification context numerical results are provided for classifying prices in ontario s and alberta s markets

global value chains large scale farming and poverty long term effects in senegal this paper presents panel data evidence on the impact of expansion of global value chains and large scale export oriented farms in developing countries over almost a decade we estimate the income effects of wage employment on large scale farms in the horticultural export sector in senegal using data from two survey rounds covering a seven years period of rapid expansion of the sector we estimate average income effects as well as heterogeneous income effects using fixed effects and quantile fixed effects regressions we find that poverty and inequality reduced much faster in the research area than elsewhere in senegal employment in the horticultural export sector is associated with higher household income and the income effect is strongest for the poorest households expansion of the horticultural export sector in senegal has been particularly pro poor through creating employment that is accessible and creates substantial income gains for the poorest half of the rural population these pro poor employment effects contrast with insights in the literature on increased inequality from rural wage employment

the impact of group based credit programs on poor households in bangladesh does the gender of participants matter this paper estimates the impact of participation by gender in the grameen bank and two other group based micro credit programs in bangladesh on labor supply schooling household expenditure and assets the empirical method uses a quasi experimental survey design to correct for the bias from unobserved individual and village level heterogeneity we find that program credit has a larger effect on the behavior of poor households in bangladesh when women are the program participants for example annual household consumption expenditure increases 18 taka for every 100 additional taka borrowed by women from these credit programs compared with 11 taka for men

housing and the macroeconomy inflation and the financial accelerator three themes connecting housing and the macroeconomy are discussed first evidence is presented for the property market as one of the drivers of u s consumer price inflation second key drivers of house prices are explained to account for the remarkable diversity of international experience finally three potential links between housing credit and the financial accelerator are discussed these are the consumption channel the investment channel and feedback between bad loans and risk spreads via the financial system and how institutional differences between countries can explain the presence absence and magnitudes of these linkages

private enforcement capital and contract enforcement in transition economies the enforcement of contracts is necessary for efficient exchange and investment in economic activities there are many situations where public institutions are ineffective in enforcing contracts this is the case in economies in transition where public enforcement institutions themselves are being reformed under such conditions private mechanisms could enforce contracts external private enforcement is done by third parties e g strong arm private agents although such enforcement may be effective it may have unwanted externalities alternatively internal private enforcement can be done through the use of so called private enforcement capital i e private losses that result from breaching the contract these losses result directly from contract termination or non renewal and indirectly from reputational damage by designing contracts such that these private losses from contract breach outweigh potential benefits contracts can be made self enforcing in this article we first present a conceptual framework to interpret contracts and to analyze how the use of private enforcement capital can enforce contracts then we illustrate such internal private contract enforcement mechanisms with several case study examples of agri business contracting in transition countries where public enforcement fails

food standards certification and poverty among coffee farmers in uganda summary voluntary standards are gaining in importance in global markets for high value foods we analyze and compare impacts of three sustainability oriented standards fairtrade organic and utz on the livelihoods of smallholder coffee farmers in uganda using survey data and propensity score matching with multiple treatments we find that fairtrade certification increases household living standards by 30 and reduces the prevalence and depth of poverty for the other two certification schemes no significant impacts are found several factors that can explain differential impacts are discussed overly general statements about the effects of sustainability standards on smallholder livelihoods may be misleading

housing wealth and consumption a micro panel study there is strong evidence that house prices and consumption are synchronised there is however disagreement over the causes of this link this study examines if there is a wealth effect of house prices on consumption using a household level panel data set with information about house ownership income wealth and demographics for a large sample of the danish population in the period 1987 96 we model the dependence of the growth rate of total household expenditure with unanticipated innovations to house prices controlling for factors related to competing explanations we find little evidence of a housing wealth effect

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

home is where the equity is mortgage refinancing and household consumption applying a permanent income model with exogenous liquidity constraints and mortgage behavior household refinancing when mortgage interest rates are historically high and rising a persistent empirical puzzle is explained using data from the panel study of income dynamics households experiencing an unemployment shock and having limited initial liquid assets to draw upon are shown to have been 25 more likely to refinance 1991 94 on average such liquidity constrained households converted over two thirds of every dollar of equity they removed into current consumption as mortgage rates plummeted 1991 94 producing an estimated expenditure stimulus of at least 28 billion