Poverty status and the impact of social networks on smallholder technology adoption in rural Ethiopia

Despite recent traces of economic growth, Ethiopia remains one of the poorest countries in the world. Though about 80% of its population is engaged in agriculture, agricultural productivity remains low and extremely vulnerable to climatic conditions. The adoption and use of modern technologies is generally accepted as a potential vehicle out of poverty for many but adoption rates in the country remain low with the nature of the adoption process largely unstudied (Spielman et al, 2007). This paper studies the impact of social networks in the technology adoption process in rural Ethiopia. In particular it tests for the presence of social learning effects. In addition to geographic networks, it considers the role played by other networks with more purposeful interactions such as a household’s friends. The study explores the differential impacts of social networks by network type, technology and the asset poverty status of households.social learning, persistent poverty, technology adoption, Ethiopia, Food Security and Poverty, International Development, Research and Development/Tech Change/Emerging Technologies, O31, O33, Q12, Q13,

Sales location and supply response among semisubsistence farmers in Benin

In much of rural Africa, high transaction costs limit farmers’ market participation and thus their potential for income growth. Transaction costs can affect not only whether a farmer sells product but also whether sales occur at the farm gate on at a market. If production behavior is related to a chosen sales location, then analysis of interventions can be improved by explicit consideration of the decision of where to sell. This paper develops a double-selection model that explains consumption and production decisions by semi-subsistence farmers who first decide whether to be a seller and then whether to sell at the farm gate or at an off-farm location before deciding on production and consumption. The study tests the validity of this dual-criteria model against a single criterion model in which a grower first decides to be a seller and then decides production, consumption and sales location simultaneously. Dual-criteria and single-criterion models are compared while correcting inconsistency in estimations due to violation of homoskedasticity and normality assumptions in selection equations. The results suggest that the dual-criteria model provides more information than the single-criterion model using a sample of cassava producer in Benin.agricultural supply response, Development strategies, dual-criteria, sales location, Transaction costs,

Distortions to Agricultural Incentives in Kenya

Distorted incentives, agricultural and trade policy reforms, national agricultural development, Agricultural and Food Policy, International Relations/Trade, F13, F14, Q17, Q18,

A SPATIAL MODEL OF ANIMAL DISEASE CONTROL IN LIVESTOCK: EMPIRICAL ANALYSIS OF FOOT AND MOUTH DISEASE IN THE SOUTHERN CONE

This paper presents a multi-market model of animal disease control that extends the current literature by accounting for spatial and inter-temporal relations in both epidemiological and economic variables. The model is applied to Foot and Mouth Disease control in Argentina, Uruguay and Paraguay, but it is broadly generalizable.Research Methods/ Statistical Methods,

Vertical Integration and Dis-integration of Computer Firms: A History Friendly Model of the Co-evolution of the Computer and Semiconductor Industries

In this paper we present a history-friendly model of the changing vertical scope of computer firms during the evolution of the computer and semiconductor industries. The model is "history friendly", in that it attempts at replicating some basic, stylized qualitative features of the evolution of vertical integration on the basis of the causal mechanisms and processes which we believe can explain the history. The specific question addressed in the model is set in the context of dynamic and uncertain technological and market environments, characterized by periods of technological revolutions punctuating periods of relative technological stability and smooth technical progress. The model illustrates how the patterns of vertical integration and specialization in the computer industry change as a function of the evolving levels and distribution of firms' capabilities over time and how they depend on the co-evolution of the upstream and downstream sectors. Specific conditions in each of these markets - the size of the external market, the magnitude of the technological discontinuities, the lock-in effects in demand - exert critical effects and feedbacks on market structure and on the vertical scope of firms as time goes by

Firm Capabilities, Competition and Industrial Policies in a History-Friendly Model of the Computer Industry

In this paper, we explore some problems that industrial policy faces in industries characterized by dynamic increasing returns on the basis of a 'history friendly model' of the evolution of the computer industry. How does policy affect industry structure over the course of industry evolution? Is the timing of the intervention important? Do policy interventions have indirect and perhaps unintended consequences on different markets at different times? We focus on two sets of policies: antitrust and interventions aiming at supporting the entry of new forms in the industry. The results of our simulations show that, if strong dynamic increasing returns are operative, both through technological capabilities and through customer tendency to stick with a brand, there is little that antitrust and entry policy could have done to avert the rise of a dominant firm in mainframes. On the other hand, if the customer lock in effect had been smaller, either by chance or through policies that discouraged efforts of firms to lock in their customers, the situation might have been somewhat different. In the first place, even in the absence of antitrust or entry encouraging policies, market concentration would have been lower, albeit a dominant firm would emerge anyhow. Second, antitrust and entry encouraging policies would have been more effective in assuring that concentration would decrease. The leading firm would continue to dominate the market, but its relative power would be reduced. © Elsevier Science B.V

SEQUENTIAL INVESTMENT IN SITE-SPECIFIC CROP MANAGEMENT UNDER OUTPUT PRICE UNCERTAINTY

An option-value model is developed to analyze the impacts of output price uncertainty, high sunk costs of adoption, and site-specific conditions on the optimal timing of adoption of two interrelated site-specific technologies, soil testing and variable rate technology (VRT). The model incorporates the potential for adopting these two technologies jointly or sequentially. The implications of the pattern of adoption for nitrogen pollution and for the design of a cost-share subsidy policy to accelerate the adoption of these technologies to reduce nitrogen pollution are also analyzed. Ignoring the potential for sequential adoption would tend to underpredict the adoption so soil testing and overpredict the adoption of VRT. Cost-share subsidies to induce accelerated adoption of VRT would be most effective at reducing nitrogen pollution if targeted toward fields with relatively high spatial variability in soil quality or soil fertility, and either low average soil quality or low average soil fertility.Demand and Price Analysis,

Purpose and potential for commodity exchanges in African economies:

This paper reviews the purpose and potential of commodity exchanges in Africa. Drawing from the existing literature and using indicative empirics, it examines the conditions that enable successful exchanges, highlights the special challenges to setting up exchanges in Africa, and reviews alternatives to domestic exchanges. We argue that many critical preconditions for the successful establishment of commodity exchanges in Africa remain binding in the short to medium term. The development of commodity exchanges in the region is impeded by the relatively small size of domestic commodity markets, the weak physical and communication infrastructure, a lack of supportive legal and regulatory environments, and the likelihood of policy interventions, particularly in the staple cereals market. Meanwhile, the demand for a domestic commodity exchange for export crops may be limited due to the availability of well-established exchanges abroad and functioning auction floors. The paper highlights three points: (a) efforts to launch exchanges in Africa should realistically assess whether basic conditions for success can be met, (b) if the pre-conditions cannot be met, the use of existing exchanges abroad or the development of regional exchanges may be more feasible than the establishment of national commodity exchanges, and (c) the goals of risk management and reduced transaction costs might be achieved more effectively by improving market fundamentals through investments in transportation, information services, or other financial institutions.commodity exchanges, Risk management, Market development,

Asset versus consumption poverty and poverty dynamics in the presence of multiple equilibria in rural Ethiopia

Effective poverty reduction programs require careful measurement of poverty status. Several studies have shown conceptually that assets reflecting productive capacity form a more robust basis for identifying the poor than do flow variables such as expenditures or income. Nonetheless, little work has empirically compared poverty measurements based on assets and expenditures. This paper uses panel data from Ethiopia to generate an asset-based poverty classification scheme. Regression results are used to estimate an asset index and classify households into categories of structural poverty. Asset index dynamics are also explored to test for the existence of multiple asset index equilibria; evidence of potential poverty traps. Results provide evidence of multiple equilibria in the study sample as a whole as well as convergence at different levels over space, depending on commercialization opportunities and agroecological factors. The asset-based poverty classifications consistently predict future poverty status more accurately than do income-based measures, confirming that the asset-based measure could be used to more carefully target poverty interventions in rural areas and to more accurately assess the impact of those interventions.asset index, asset poverty, Commercialization, expenditures, income-based measures, index equilibria, Poverty dynamics, Poverty reduction, regression,