How Population Density Influences Agricultural Intensification and Productivity: Evidence from Ethiopia

We use household-level panel data to estimate how population density impacts agricultural intensification and farm income in Ethiopia. We hypothesize that increases in population density affect agricultural intensification and farm income directly through information flows, institutional development, and reduction in transactions costs. Increases in population density also affect agricultural intensification and farm income indirectly through farm size, agricultural wage rates, and staple crop prices. We find that increases in population density lead to lower farm sizes, which has major implications for agricultural intensification and household well-being. Our analysis indicates that increases in population density cause farmers to purchase more inorganic fertilizer per hectare. This is due to population density\u27s direct effects on market access. However, we find that population density does not have a statistically significant effect on maize yields, teff yields or farm income per hectare

Household Decision Making Under Stress: Three Essays on Agricultural Production in Southern Africa

Rural households in Southern Africa face numerous economic challenges, arising from a range of idiosyncratic and covariate risks. This research seeks to understand strategies employed by households to cope with different types of shocks, in the context of Zimbabwe and Malawi. I focus on several techniques used to cope with risk and shocks in an uncertain environment, including intra-household resource, land, and crop, as well as labor allocations. To provide insight on household decision making, I expand and adapt theoretical models. This helps me to better understand household decision making in the complex and risky environments in which they reside and to more broadly grasp the dynamics of small households in the developing world. This research is comprised of four chapters, including an introduction and three distinct essays. I consider three topics relevant to agricultural households: (1) intra-household dynamics, (2) crop choice decisions, and (3) labor allocations. I consider these three topics, and the way in which households treat them in their increasingly risky, complex, and changing environments. In the first essay, I extend the typical considerations of intra-household dynamics by examining joint income: income that is earned and shared by men and women working together. Using data from 693 households in Malawi, I empirically test the assumption that all household income is pooled, when joint income, as well as income earned individually by men and women, is accounted for in the analysis. develop an intra-household collective model which explicitly includes joint and individual relationships to explain income allocation. To evaluate changes in income and expenditure, I use rainfall variation, as different levels of rainfall will have different impacts on the production by different households members. Ultimately, I reject the hypothesis of complete income pooling and full insurance within the household. However, I find evidence that household members pool income and insure one another for expenditures on essential goods and thus I conclude that there is strategic income pooling behavior with respect to particular types of expenditure, resulting in partial insurance for the household. In the second essay, I investigate the decision to grow and allocate area to sorghum, a long-promoted, drought resistant crop in Southern Africa. Sorghum, though tolerant to extreme weather conditions, is not considered to be delicious or worth eating to many individuals in Zimbabwe. Using a panel of 355 households located across Southern Zimbabwe, I employ a behavioral model, which explicitly accounts for households’ own preferences and characteristics, as well as the perceived and inherent traits of crops. In a context in which households are largely producers and consumers of their own food, I find that own household preferences dominate the decision to allocate area to sorghum. The inherent drought resistant traits of sorghum are relevant when households are faced with variable and low average rainfall. Additionally, participation in off-farm labor drives planting behavior, serving as an alternative strategy for households facing drought and the complexities of cultivating crops in a more arid environment; households which have members working off-farm are less likely to plant sorghum, suggesting that they purchase food with income earned off-farm, should their maize crop be insufficient. These results indicate that preferences must be considered when examining households’ planting behavior. Finally, in the third essay, I investigate ex post labor reallocation as a household strategy for coping with unanticipated events. The study spans a period of extreme unrest and stress: I measure the responses of 355 households to death and rainfall shocks in Zimbabwe, during the country’s long-term economic crisis with data from 2005 and 2013. In this strained environment, shocks compound existing stresses. I find that, as relative returns to agriculture fall, households are pushed out of the farm sector into off-farm work and shocks tend to exacerbate household responses to these pushes. There is also strong heterogeneity in responses, in part related to household characteristics. Wealthier and larger households are more likely to return to on-farm labor following a shock than their poorer and smaller cohorts, who instead diversify (or are forced to diversify) the household labor portfolio through migration and reliance on off-farm earnings. Taken together, these results suggest that household strategies differ depending on household characteristics and individual traits. Central within all of these essays is the examination of questions about how households cope with unanticipated events, experienced risk, and unexpected shocks. When their conditions change and new situations arise, households must find a way to adapt, within the constraints imposed by the circumstances of their context. My ultimate ambition with this research is to better understand these contexts and constraints, and thus the microeconomic challenges facing rural households in developing nations in Southern Africa

Household Decision Making Under Stress: Three Essays on Agricultural Production in Southern Africa

Rural households in Southern Africa face numerous economic challenges, arising from a range of idiosyncratic and covariate risks. This research seeks to understand strategies employed by households to cope with different types of shocks, in the context of Zimbabwe and Malawi. I focus on several techniques used to cope with risk and shocks in an uncertain environment, including intra-household resource, land, and crop, as well as labor allocations. To provide insight on household decision making, I expand and adapt theoretical models. This helps me to better understand household decision making in the complex and risky environments in which they reside and to more broadly grasp the dynamics of small households in the developing world. This research is comprised of four chapters, including an introduction and three distinct essays. I consider three topics relevant to agricultural households: (1) intra-household dynamics, (2) crop choice decisions, and (3) labor allocations. I consider these three topics, and the way in which households treat them in their increasingly risky, complex, and changing environments. In the first essay, I extend the typical considerations of intra-household dynamics by examining joint income: income that is earned and shared by men and women working together. Using data from 693 households in Malawi, I empirically test the assumption that all household income is pooled, when joint income, as well as income earned individually by men and women, is accounted for in the analysis. I develop an intra-household collective model which explicitly includes joint and individual relationships to explain income allocation. To evaluate changes in income and expenditure, I use rainfall variation, as different levels of rainfall will have different impacts on the production by different households members. Ultimately, I reject the hypothesis of complete income pooling and full insurance within the household. However, I find evidence that household members pool income and insure one another for expenditures on essential goods and thus I conclude that there is strategic income pooling behavior with respect to particular types of expenditure, resulting in partial insurance for the household. In the second essay, I investigate the decision to grow and allocate area to sorghum, a long-promoted, drought resistant crop in Southern Africa. Sorghum, though tolerant to extreme weather conditions, is not considered to be delicious or worth eating to many individuals in Zimbabwe. Using a panel of 355 households located across Southern Zimbabwe, I employ a behavioral model, which explicitly accounts for households\u27 own preferences and characteristics, as well as the perceived and inherent traits of crops. In a context in which households are largely producers and consumers of their own food, I find that own household preferences dominate the decision to allocate area to sorghum. The inherent drought resistant traits of sorghum are relevant when households are faced with variable and low average rainfall. Additionally, participation in off-farm labor drives planting behavior, serving as an alternative strategy for households facing drought and the complexities of cultivating crops in a more arid environment; households which have members working off-farm are less likely to plant sorghum, suggesting that they purchase food with income earned off-farm, should their maize crop be insufficient. These results indicate that preferences must be considered when examining households\u27 planting behavior. Finally, in the third essay, I investigate ex post labor reallocation as a household strategy for coping with unanticipated events. The study spans a period of extreme unrest and stress: I measure the responses of 355 households to death and rainfall shocks in Zimbabwe, during the country\u27s long-term economic crisis with data from 2005 and 2013. In this strained environment, shocks compound existing stresses. I find that, as relative returns to agriculture fall, households are pushed out of the farm sector into off-farm work and shocks tend to exacerbate household responses to these pushes. There is also strong heterogeneity in responses, in part related to household characteristics. Wealthier and larger households are more likely to return to on-farm labor following a shock than their poorer and smaller cohorts, who instead diversify (or are forced to diversify) the household labor portfolio through migration and reliance on off-farm earnings. Taken together, these results suggest that household strategies differ depending on household characteristics and individual traits. Central within all of these essays is the examination of questions about how households cope with unanticipated events, experienced risk, and unexpected shocks. When their conditions change and new situations arise, households must find a way to adapt, within the constraints imposed by the circumstances of their context. My ultimate ambition with this research is to better understand these contexts and constraints, and thus the microeconomic challenges facing rural households in developing nations in Southern Africa

To Specialize or Diversify: Agricultural Diversity and Poverty Persistence in Ethiopia

This article answers the empirical question: what is the relationship between the choice to specialize or diversify in crop production and household poverty status? We use household panel data from Ethiopia and a recently developed parametric method for estimating dynamic binary response models with endogenous contemporaneous regres- sors. Our results provide evidence that households which grow a diverse set of crops are less likely to be poor. Additionally, crop diversity reduces the probability that a house- hold will fall into poverty and reduces the probability that a household will remain in poverty. We conclude that policies which encourage households to specialize in cash crops may be counter-productive while policies which encourage crop diversification may reduce poverty

The Demand and Supply for Post-Katrina Disaster Aid: A Triple-Hurdle Model of SBA Disaster Loans for Small Businesses in Mississippi

Following Hurricane Katrina, the United States government provided $45 billion in loans and rebuilding funds to individuals and businesses for the purpose of repairing the damage caused by the hurricane. However, it is not yet clear what impact this assistance had on small businesses in affected areas. In particular, the role of Small Business Administration (SBA) loans has yet to be fully examined. Though few doubt the benefits of short-term and immediate disaster relief, there is some debate on the benefits of SBA loans. Evidence suggests that receiving business loans may do more harm than good, if the loan ultimately increases debt load. In this study we contribute to the disaster relief literature through completing the first analysis regarding the receipt of SBA loans after Hurricane Katrina. We find that there are several characteristics which increase the probability of application for a loan, but a set of different characteristics which determine the amount ultimately received. Further, results indicate that targeting programs for certain groups such as women or minorities were unsuccessful in directing loans to these groups

How does population density influence agricultural intensification and productivity? Evidence from Ethiopia

AbstractThis study uses household-level panel data on smallholder farmers in Ethiopia to estimate how rural population density (RPD) affects agricultural intensification and productivity. Our results suggest that higher RPD is associated with smaller farm sizes, and has a positive effect on input demand, represented by increased fertilizer use per hectare. Overall, increased input use does not lead to a corresponding increase in staple crop yields, and thus farm income declines as population density increases. This suggests a situation where farmers in areas of high RPD may be stuck in place, unable to sustainably intensify in the face of rising RPD and declining farm sizes