nep-afr New Economics Papers
on Africa
Issue of 2007‒07‒20
five papers chosen by
Suzanne McCoskey
George Washington University

  1. The impact of climate change on livestock management in Africa : a structural Ricardian analysis By Seo, Sungno Niggol; Mendelsohn, Robert
  2. Climate change adaptation in Africa : a microeconomic analysis of livestock choice By Seo, Sungno Niggol; Mendelsohn, Robert
  3. Endogenous irrigation : the impact of climate change on farmers in Africa By Kurukulasuriya, Pradeep; Mendelsohn, Robert
  4. A Tentative Model of Conflict, Appropriation and Production in a two-sector Economy By Caruso, Raul
  5. Can Higher Prices Stimulate Product Use? Evidence from a Field Experiment in Zambia By Nava Ashraf; James Berry; Jesse M. Shapiro

  1. By: Seo, Sungno Niggol; Mendelsohn, Robert
    Abstract: This paper develops the structural Ricardian method, a new approach to modeling agricultural performance using cross-sectional evidence, and uses the method to study animal husbandry in Africa. The model is intended to estimate the structure beneath Ricardian results in order to understand how farmers change their behavior in response to climate. A survey of over 5,000 livestock farmers in 10 countries reveals that the selection of species, the net income per animal, and the number of animals are all highly dependent on climate. As climate warms, net income across all animals will fall, especially across beef cattle. The fall in net income causes African farmers to reduce the number of animals on their farms. The fall in relative revenues also causes them to shift away from beef cattle and toward sheep and goats. All farmers will lose income but the most vulnerable farms are large African farms that currently specialize in beef cattle. Small livestock and large livestock farms respond to climates differently. Small farms are diversified, relying on dairy cattle, goats, sheep, and chickens. Large farms specialize in dairy and beef cattle. Estimating a separate multinomial logit selection model for small and large farms reveals that the two types of farm choose species differently and specifically have different climate response functions. The regressions of the number of animals also reveal that large farms are more responsive to climate. The results indicate that warming will be harmful to commercial livestock owners, especially cattle owners. Owners of commercial livestock farms have few a lternatives either in crops or other animal species. In contrast, small livestock farms are better able to adapt to warming or precipitation increases by switching to heat tolerant animals or crops. Livestock operations will be a safety valve for small farmers if warming or drought causes their crops to fail.
    Keywords: Livestock & Animal Husbandry,Wildlife Resources,Rural Urban Linkages,Peri-Urban Communities,Dairies & Dairying
    Date: 2007–07–01
  2. By: Seo, Sungno Niggol; Mendelsohn, Robert
    Abstract: This paper uses quantitative methods to examine the way African farmers have adapted livestock management to the range of climates found across the African continent. The authors use logit analysis to estimate whether farmers adopt livestock. They then use three econometric models to examine which species farmers choose: a primary choice multinomial logit, an optimal portfolio multinomial logit, and a demand system multivariate probit. Compar ing the results of the three methods of estimating species selection reveals that the three approaches yield similar results. Using data from over 9,000 African livestock farmers in 10 countries, the analysis finds that farmers are more likely to choose to have livestock as temperatures increase and as precipitation decreases. Across all methods of estimating choice, livestock farmers in warmer locations are less likely to choose beef cattle and chickens and more likely to choose goats and sheep. As precipitation increases, cattle and sheep decrease but goats and chickens increase. The authors simulate the way farmers ' choices might change with a set of uniform climate changes and a set of climate model scenarios. The uniform scenarios predict that warming and drying would increase livestock ownership but that increases in precipitation would decrease it. The climate scenarios predict a decrease in the probability of beef cattle and an increase in the probability of sheep and goats, and they predict that more heat-tolerant animals will dominate the future African landscape.
    Keywords: Livestock & Animal Husbandry,Wildlife Resources,Peri-Urban Communities,Rural Urban Linkages,Climate Change
    Date: 2007–07–01
  3. By: Kurukulasuriya, Pradeep; Mendelsohn, Robert
    Abstract: Previous Ricardian analyses of agriculture have either omitted irrigation or treated irrigation as though it is exogenous. In practice, it is a choice by farmers that is sensitive to climate. This paper develops a choice model of irrigation in the context of a Ricardian model of cropland. The authors examine how climate affects the decision to use irrigation and then how climate affects the net revenues of dryland and irrigated land. This Ricardian " selection " model, using a modified Heckman model, is then estimated across 8,400 farmers in Africa. The analysis explicitly models irrigation but controls for the endogeneity of irrigation. The authors find that the choice of irrigation is sensitive to both temperature and precipitation. Simulations of the welfare impacts of several climate scenarios demonstrate that a model which assumes irrigation is exogenous provides a biased estimate of the welfare effects of climate change. If dryland and irrigation are to be estimated separately in the Ricardian model, irrigation must be modeled endogenously. The results also indicate that African agriculture is sensitive to climate change. Many farmers in Africa will experience net revenue losses from warming. Irrigated farms, on the other hand, are more resilient to temperature change and, on the margin, are likely to realize slight gains in productivity. But any reduction in precipitation will be especially deleterious to dryland farmers, generally the po orest segment of the agriculture community. The results indicate that irrigation is an effective adaptation against loss of rainfall and higher temperatures provided there is sufficient water available. This will be an effective remedy in select regions of Africa with water. However, for many regions there is no available surface water, so that warming scenarios with reduced rainfall are particularly deleterious.
    Keywords: Climate Change,Environmental Economics & Policies,Water Supply and Systems,Water Resources Assessment,Global Environment Facility
    Date: 2007–07–01
  4. By: Caruso, Raul
    Abstract: This paper presents a model of conflict in an economy characterized by two sectors. In a first sector labelled as contested sector two agents struggle in order to appropriate the maximum possible fraction of a contestable output. In a second sector, the uncontested sector, each agent holds secure property rights over the production of some goods. Both agents maximize an income function which can be described as a function of contributions of both sectors. Results show that the degree of returns in the uncontested sector is a powerful force which countervails the impact of destructive and unproductive interaction in the contested sector.
    Keywords: Conflict; Productive and Unproductive Activities; Butter and Guns; Crime; Warlords; Civil War.
    JEL: D20 D74 F51
    Date: 2007–07
  5. By: Nava Ashraf; James Berry; Jesse M. Shapiro
    Abstract: The controversy over whether and how much to charge for health products in the developing world rests, in part, on whether higher prices can increase use. We test this hypothesis in a field experiment in Zambia using door-to-door marketing of a home water purification solution. Our methodology separates the screening effect of prices (charging more changes the mix of buyers) from the psychological effect of prices (charging more stimulates greater use for a given buyer). We find that higher prices screen out those who use the product less. The amount paid does not have a psychological effect on use, but there is some evidence that the act of paying increases use. We use our data to estimate an economic model of product use, simulate counterfactuals, and develop tentative implications for pricing policy.
    JEL: C93 D12 L11 L31
    Date: 2007–07

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