New Economics Papers
on Agricultural Economics
Issue of 2012‒09‒03
nineteen papers chosen by

  1. Agricultural Resources and Environmental Indicators, 2012 Edition By Osteen, Craig D.; Vasavada, Utpal
  2. Agricultural Production, Productivity and R&D over the Past Half Century: An Emerging New World Order By Pardey, Philip G.; Alston, Julian M.; Chan-Kang, Connie
  3. Up in Smoke?: Agricultural Commercialization,Rising Food Prices and Stunting in Malawi By Wood, Benjamin; Nelson, Carl H.; Kilic, Talip; Murray, Siobhan
  4. SUGAR CANE EXPANSION: DOES IT CONTRIBUTE TO AMAZON DEFORESTATION? By Castro, Eduardo Rodrigues de; Teixeira, Erly Cardoso; Valdes, Constanza
  6. Distance to market and search costs in an African maize market By Mahdi, Shireen
  7. Input Subsidies, Cash Constraints and Timing of Input Supply:-Experimental Evidence from Malawi By Holden, Stein T.; Lunduka, Rodney
  8. A Comparative Study of Risk Management in Agriculture under Climate Change By Jesús Antón; Shingo Kimura; Jussi Lankoski; Andrea Cattaneo
  9. Analysis of efficiency in sugarcane production: the case of men and women headed households in SONY sugar out -grower zone, Rongo and Trans-Mara districts, Kenya By Nyanjong', Oyugi Johana; Lagat, Job
  10. Reciprocal Trade Agreements: Impacts on U.S. and Foreign Suppliers in Commodity and Manufactured Food Markets By Roberts, Donna; Vollrath, Thomas L.; Grant, Jason; Hallahan, Charles
  11. Are international food price spikes the source of Egypt's high inflation ? By Al-Shawarby, Sherine; Selim, Hoda
  12. The impact of food and economic crises on diet and nutrition By Ralitza Dimova; Ira N. Gang; Monnet B. P. Gbakou; Daniel Hoffman
  13. The ecological price of getting rich in a green desert: A contingent valuation study in rural Southwest China By Ahlheim, Michael; Börger, Tobias; Frör, Oliver
  14. Market structure and coherence of international cooperation: the case of the dairy sector in Malawi By Revoredo-Giha, Cesar
  15. On the colonial origins of agricultural development in India: a re-examination of Banerjee and Iyer, ‘History, institutions and economic performance’ By Vegard Iversen; Richard Palmer-Jones; Kunal Sen
  16. Quality contingent contracts : evidence from Tanzania's coffee market By Mahdi, Shireen
  17. A method for constructing an index of sustainable intensification within the developed country context By Barnes, Andrew P.
  18. Evaluating the potentials of a marketable permits system in the field: An application to forest conservation in Shaktikhore, Nepal By Timilsina Raja Rajendra; Koji Kotani
  19. The Link between Agricultural Output and the States of Poverty in the Philippines: Evidence from Self-Rated Poverty Data By Mapa, Dennis S.; Lucagbo, Michael; Garcia , Heavenly Joy

  1. By: Osteen, Craig D.; Vasavada, Utpal
    Abstract: Agricultural Resources and Environmental Indicators, 2012, describes trends in economic, structural, resource, and environmental indicators in the agriculture sector, focusing on changes since the release of Agricultural Resources and Environmental Indicators, 2006. These indicators are useful to assess important changes in U.S. agriculture—the industry’s development; its environmental effects; and the implications for economic, social, and environmental sustainability. This report tracks key resources, including natural, produced, and management resources, that are used in and affected by agricultural production, as well as structural changes in farm production and the economic conditions and policies that influence agricultural resource use and its environmental impacts. Each chapter provides a concise overview of a specific topic with links to sources of additional information.
    Keywords: Agricultural biotechnology, conservation policy, conservation programs, farm types, fertilizer use, land use, land values, organic production, pest management, productivity, research and development, soil management, water use., Environmental Economics and Policy, Farm Management, Resource /Energy Economics and Policy,
    Date: 2012–08
  2. By: Pardey, Philip G.; Alston, Julian M.; Chan-Kang, Connie
    Abstract: Recent trends in farm productivity and food prices raise concerns about whether the era of global agricultural abundance is over. Agricultural R&D is a crucial determinant of agricultural productivity and production, and therefore food prices and poverty. In this paper we review past and present agricultural production and productivity trends and present entirely new evidence on investments in public agricultural R&D worldwide as an indicator of the prospects for agricultural productivity growth over the coming decades. The agricultural R&D world is changing, and in ways that will definitely affect future global patterns of poverty, hunger and other outcomes. The global picture is mixed. In the world as a whole crop yield growth has slowed. In high-income countries productivity growth has slowed significantly, and real spending on agricultural R&D is being reduced. In China, and other middle-income countries, spending on agricultural R&D is being ramped up and productivity growth has not slowed. The overall picture is one in which the middle-income countries are growing in relative importance as producers of agricultural innovations through investments in R&D and have consequently better prospects as producers of agricultural products.
    Keywords: Agricultural and Food Policy, Productivity Analysis, Research and Development/Tech Change/Emerging Technologies,
    Date: 2012
  3. By: Wood, Benjamin; Nelson, Carl H.; Kilic, Talip; Murray, Siobhan
    Abstract: Agricultural commercialization, or the transition from food to cash crops, has gained increasing attention over the past few decades. Plans for developing world farmers to focus on labor-intensive cash crops, to exploit their natural comparative advantage, typically depend on stable food markets to supply these formerly subsistence households. The trade-off between cash and food crop production requires reevaluation in the context of numerous food price spikes and general food price increases experienced globally over the last decade. Discovery of a correlation between Malawian cash crop production and low nutritional health outcomes creates questions of the traditional development path. This paper clarifies the causal effect behind that negative relationship. A nationally representative data set and the 2002-2003 Malawian domestic food crisis allow for time-specific comparisons between the health of children in utero during stable and increasing food price markets. Identifying children exposed to in utero food shocks is the first step to explaining the recent changes in the nutritional outcomes of cash crop producers. Estimates of the effects of Malawian crop adoption on children’s health are obtained using robust inference techniques. The causal effects of cash crop production are identified by instrumenting endogenous adoption decisions with predetermined variables. The findings show children of cash crop farmers experienced disproportionately negative effects if they were in utero during the food price shock. The results support the argument that food price shocks negatively influence those more reliant on the market for food purchases, suggesting the need for targeting small scale commercial farmers during times of staple food price spikes.
    Keywords: Malawi, poverty, food prices, cash crops, tobacco, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, International Development, D13, I15, O13, Q16,
    Date: 2012
  4. By: Castro, Eduardo Rodrigues de; Teixeira, Erly Cardoso; Valdes, Constanza
    Abstract: The aim of this study is to investigate the direct and indirect impacts of sugarcane expansion on deforestation in the Brazilian Amazon from 2001 to 2008. The analysis is based on the multi-output production theory where the annual agricultural acreage represents the Production Possibility Frontier. It assumes that agricultural area is limited and any agricultural expansion occurs over traditional agricultural areas displacing some crops and pushing them to the agricultural frontier, where forests will be cleared. The econometric analysis was carried out using a panel data model where the counties are the cross section unity. The output supply for São Paulo state and the agricultural frontier states (Mato Grosso, Rondônia, Maranhão and Tocantins) in the Center-West region are estimated separately, considering the acreage as proxy of the output and the crop prices of sugarcane, soybean, corn, beans, cotton and the total annual acreage as the independent variables. The impact of crop prices and the annual agricultural crop expansion over the deforestation acreage are also estimated. Our best estimates reveal that it is not possible to establish a direct connection between sugarcane area expansion and Amazon deforestation, and while the indirect effects are very small, sugarcane also expanded over pastures and perennial crops, leading to an overall increase in annual crop area.
    Keywords: Brazil, sugarcane, agricultural frontier, Amazon deforestation, Agricultural and Food Policy, Crop Production/Industries, Research Methods/ Statistical Methods, Q110, Q160, Q230,
    Date: 2012–08–20
  5. By: Kankwamba, Henry; Mangisoni, Julius H.; Simtowe, Franklin; Mausch, Kai; Siambi, Moses
    Abstract: The overall objective of this paper is to assess the demand for improved groundnut, bean, and soybean seed in central Malawi. Specifically, it examines how smallholder farmers respond to changes in market prices of improved legume seed. It also assesses factors that affect the decision to participate in improved seed technology transfer. Considering four commodities namely groundnuts, beans, soybeans and maize, a staple food, the paper estimates a multivariate probit and a linear approximate of the Almost Ideal Demand System (LA/AIDS) using cross section data collected by ICRISAT in 2010. Uncompensated price and expenditure elasticities are reported for the LA/AIDS model. The paper finds high own price elasticities in all four commodities considered. It also indicates that land, household size and education levels affect participation in improved technology. Cross elasticities varied across the commodities considered. As pertain expenditure elasticities, farmers would increase expenditure on improved groundnut and beans if their incomes increased. The results also reveal that if farmers’ incomes increase they would reduce soybean’s expenditure share. The results generally show that farmers are very sensitive to changes in improved legume seed prices and incomes.
    Keywords: legumes, demand, LA/AIDS, multivariate probit, Agricultural and Food Policy, Crop Production/Industries, Production Economics,
    Date: 2012
  6. By: Mahdi, Shireen
    Abstract: Farm-gate buying by small itinerant buyers is the dominant mode of primary marketing in Tanzania's maize market. This paper estimates the effect of household distance to market on maize farm-gate prices, and the extent to which seasonally determined search costs can explain price variations between the lean and the harvest seasons using data from the most recent Tanzania Household Budget Survey (2007). The author observes that greater distance to market depresses farm-gate prices but that it is a relatively modest effect, and that this effect is pro-cyclical in that it is stronger during the harvest season when prices are lowest. The paper discusses the latter result with reference to search costs as an explanatory factor. It also briefly places the findings in the context of Tanzania's food security patterns, making a link between food insecurity and high search costs. The main policy conclusion is that coordinating mechanisms such as village market places (in parallel with farm-gate buying) may reduce transaction costs in rural markets.
    Keywords: Markets and Market Access,Transport Economics Policy&Planning,E-Business,Food&Beverage Industry,Access to Markets
    Date: 2012–08–01
  7. By: Holden, Stein T.; Lunduka, Rodney
    Abstract: The study investigated the demand for fertilizer among rural farm households in Malawi that have been exposed to high fertilizer subsidy levels. Subsidies and cash constraints may limit their demand but their cash constraint may be less severe at harvest time than at planting time when they normally get their inputs. Three different experiments were used to assess the demand for fertilizer at harvest time and at planting time, to elicit farm gate shadow prices for fertilizer and to assess the gap between WTA and WTP prices for a standard input package The experiments demonstrated significant effects of timing and of cash constraints.
    Keywords: Malawi, input subsidies, fertilizer, cash constraints, time inconsistency, input delivery timing., Agricultural and Food Policy, Consumer/Household Economics, Crop Production/Industries, Food Security and Poverty, Institutional and Behavioral Economics, Political Economy, Q12, Q18,
    Date: 2012–08–16
  8. By: Jesús Antón; Shingo Kimura; Jussi Lankoski; Andrea Cattaneo
    Abstract: Climate change affects the mean and variability of weather conditions and the frequency of extreme events, which to a great extent determines the variability of production and yields. This paper reviews the scientific literature on the impacts of climate change on yield variance and investigates their implications for the demand of crop insurance and effectiveness of different farm strategies and policy measures using crop farm data in Australia, Canada and Spain. A microeconomic farm level model is calibrated to different types of farms and used to simulate the responses and impacts of four policy measures: ex post disaster payments and three types of crop insurance (individual yields, area-based yield and weather index). The strong uncertainties about climate change are captured in a set of seven scenarios covering different assumptions about the scope of climate change (no change, marginal change, and high occurrence of extreme events), and farmers’ adaptation response (no adaptation, diversification, and structural adaptation). Policy decision making under these uncertainties is analysed using a standard Bayesian probabilistic approach, but also using other criteria that look for robust second best choices (MaxiMin and Satisficing criteria).
    Keywords: uncertainty, climate change, adaptation, Crop insurance, second best policies
    JEL: D81 G22 Q18 Q54
    Date: 2012–07
  9. By: Nyanjong', Oyugi Johana; Lagat, Job
    Abstract: About one quarter of cane producers in SONY Outgrower Zone are women headed households. However, a number of studies have suggested that women in rural areas are more disadvantaged in terms of accessing education, land, credit, and extension services. If this is the case, women cane farmers would be expected to be less efficient compared to men farmers. Before this can be concluded, there was need to establish whether differences in economic efficiency between men and women headed households exist in cane growing. The objectives of the research were; to characterize men and women headed cane growing households, to evaluate the relationship between institutional factors and gender, and to determine the differences in economic efficiency between men and women managed sugarcane farms. A multi stage sampling procedure was employed to select 205 active sugarcane farmers. A dual parametric stochastic decomposition technique was employed to disaggregate the components of economic efficiency. FRONTIER 4.1 program was used to derive maximum likelihood estimates and farm level technical efficiencies. A two limit Tobit model was then used to determine the influence of selected socio-economic and institutional variables on farm level technical, allocative and economic efficiency. Results showed that men headed households had a mean technical efficiency of 67.6%, a mean allocative efficiency of 82.48% and a mean economic efficiency of 58.0%. Women headed households had a mean technical efficiency of 72.0%, a mean allocative efficiency of 83.15% and a mean economic efficiency of 62.5%. Land under sugarcane cultivation was the single most important contributor to farmers’ efficiency. Women managed farms were on average more technically, allocative and economically efficient than men managed farms. Membership to outgrower associations in addition to encouraging increase in human capital will be important in enhancing farmers’ efficiency.
    Keywords: efficiency; Kenya; sugarcane productivity; stochastic frontier functions
    JEL: O13 O12
    Date: 2012–06–13
  10. By: Roberts, Donna; Vollrath, Thomas L.; Grant, Jason; Hallahan, Charles
    Abstract: Reciprocal trade agreements (RTAs), which grant special preferences to members, affect the pattern and volume of bilateral trade in global markets. This study uses the gravity framework and panel data depicting annual trade between 69 countries over 31 years to examine how 11 RTAs have shaped U.S. and other suppliers’ exports of commodity and manufactured foods. Empirical results show that joint RTA membership enabled exporters to increase their trade with member country importers in the two food markets. The few agreements that failed to have a positive effect on member trade in either commodity food or manufactured food involve developing countries that typically grant very limited cross-border trade preference to member countries. Interestingly, model results indicate that RTAs can be a vehicle to increase trade externally. Nine of the 11 RTAs also expanded exports externally to nonmember countries, albeit to a lesser degree than with member importers. In some cases, however, nonmember exporters of food bore the cost of the RTA-induced expansion of trade. Five RTAs lowered food imports from nonmember suppliers. The adverse effects on nonmember suppliers were more pronounced for the United States than for other competitors.
    Keywords: Trade policy, reciprocal trade agreements, agricultural and food trade, gravity models, Agricultural and Food Policy, International Development, International Relations/Trade,
    Date: 2012–08
  11. By: Al-Shawarby, Sherine; Selim, Hoda
    Abstract: This paper examines whether domestic inflation spikes in Egypt during 2001-2011 were primarily the result of external food price shocks. To estimate the pass-through of international food price inflation to domestic price inflation, two different methodologies are used: a two-step regression model estimates the pass-through in the long run, and a vector autoregression model provides the short-run estimates. The empirical evidence confirms that pass-through is high in the short term, but not in the long run. More precisely, the results show that (i) long-run pass-through to domestic food inflation is relatively low, lying between 13 and 16 percent, while the long-term spill-over from domestic food inflation to core inflation is moderate, lying around 60 percent; (ii) in the short term, pass-through is relatively high, estimated around 29 percent after 6 months and around two-thirds after a year, but the spill-over effect to core inflation is limited; (iii) international food price shocks explain only a small portion of domestic inflation shocks in both the short and long terms; and (iv) international price inflation has asymmetric effects on domestic prices.
    Keywords: Food&Beverage Industry,Markets and Market Access,Currencies and Exchange Rates,Emerging Markets,Access to Markets
    Date: 2012–08–01
  12. By: Ralitza Dimova; Ira N. Gang; Monnet B. P. Gbakou; Daniel Hoffman
    Abstract: Abstract Skyrocketing staple food prices in combination with falling incomes around the world raised serious concerns among policy makers, media and the public at large over the past few years. We rigorously explore the dietary and nutritional implications of such shocks in a before, during and after manner. We find not only a tendency of households to reallocate their consumption baskets during a crisis, but also a dramatic change in the income and price elasticities of demand for both food and nutrients. Our results challenge the implicit assumption of relatively low and invariable price and income elasticities of demand for food and nutrition in the existing literature and have potentially important policy implications.
    Date: 2012
  13. By: Ahlheim, Michael; Börger, Tobias; Frör, Oliver
    Abstract: The cultivation of rubber trees in Xishuangbanna Prefecture in China's Yunnan Province has triggered an unprecedented economic development but it is also associated with severe environmental problems. Rubber plantations are encroaching the indigenous rainforests at a large scale and a high speed in Xishuangbanna. Many rare plant and animal species are endangered by this development, the natural water management is disturbed and even the microclimate in this region has changed over the past years. The present study aims at an assessment of these environmental costs of the economic progress in Xishuangbanna. To this end a Contingent Valuation survey is conducted to elicit local residents' willingness to pay for a reforestation program that converts existing rubber plantations back into forest. It is shown that though local people's awareness of the environmental problems caused by increasing rubber plantation is quite high their willingness to pay in order to change things is rather low. It seems that from the perspective of local residents the economic advantages of rubber cultivation outweigh the resulting environmental threats. Another explanation of the low willingness to pay stated in this survey might be the fact that many respondents consider taxes and fees already too high in China so that they are not willing to make any further contributions to whatever purpose. --
    Keywords: rubber cultivation,deforestation,contingent valuation method,environmental costs,China
    Date: 2012
  14. By: Revoredo-Giha, Cesar
    Abstract: A supply chain in disarray can be identified not only as a barrier to growth for the agricultural sector but also as one to achieving food security in a country because it may lead to either a deficiency in food production and/or too high prices. Using the dairy sector of Malawi as an example, the purpose of this paper is to discuss the coherence between market structure and the development strategy pursued by international donors via. Within Malawi the dairy sector may be characterised as a segmented market: with both formal and informal milk markets, with smallholder producers serving both markets. The formal market includes a reducing number of processing firms operating with idle capacity and selling dairy products to an affluent segment of the urban population, whilst the informal market comprises the sale of unprocessed milk products to the less affluent urban population and also rural areas. In this context, cooperative international action, conducted through agencies from a range of countries, is targeted at improving the efficiency of the formal supply chain and also the creation of local supply chains that sell processed products directly to poor consumers. The paper discusses reasons why these two cooperation strategies, given the structure of the sector, may potentially conflict with each other, the need to address the degree of market imperfection of the formal sector and the desirability of ex-ante coordination of plans amongst donors.
    Keywords: Malawi dairy supply chain, development economics, industrial organisation., Food Security and Poverty, International Development,
    Date: 2012–08
  15. By: Vegard Iversen; Richard Palmer-Jones; Kunal Sen
    Abstract: Abstract Banerjee and Iyer (henceforth, BI) (American Economic Review, 2005) find that districts which the British assigned to landlord revenue systems systematically underperform districts with non-landlord based revenue systems, especially in agricultural investment and productivity and mainly after the onset of the Green Revolution in the mid-1960s. On this basis, BI claim there were long-lasting effects of the institutions established in British India on a variety of development outcomes after independence. We correct a miscoding of the land revenue system in Central Provinces, which BI characterise as mostly landlord based, when reliable historical evidence suggest that this region should have been attributed to a mixed landlord/non-landlord based revenue system. Using a more appropriate classification of the land revenue system of the Central Provinces constructed from documented archival research, we find no evidence that agricultural performance of Indian districts in the post-independence period was adversely affected by the colonial landlord land revenue system. Our results demonstrate that the key BI argument that the more ‘oppressive’ landlord-based colonial land revenue systems mattered for post-independent agricultural development in India rests on fragile historical and statistical foundations.
    Date: 2012
  16. By: Mahdi, Shireen
    Abstract: The literature on product quality in markets where product attributes are not readily observable indicates that information asymmetries and incentive problems may lead to the under-provision of quality. This paper contributes to this literature by estimating the effects of village-level contractual arrangements on producer incomes and on quality enhancing production practices. Three contract types are studied: spot contracts, contingent contracts with product grading and contingent contracts without product grading. To do this, the study uses original data from a survey of 450 coffee producers in Tanzania's coffee market that take advantage of contractual variation in the Kilimanjaro region. The results indicate that coffee contracts that include village-based product grading have a large positive effect on producer incomes, and that the grading effect is associated with production practices that enhance quality. The results also indicate that cooperative membership has no significant effect on producer incomes.
    Keywords: Crops&Crop Management Systems,Debt Markets,Markets and Market Access,Labor Policies,E-Business
    Date: 2012–08–01
  17. By: Barnes, Andrew P.
    Abstract: A number of influential policy circles have championed sustainable intensification as an approach to meet the challenge of a growing population under increasing land constraints. Various definitions exist for sustainable intensification, but most have been focused on the environment and on the needs of developing countries. Fewer studies have applied the concept to developed economies, where the pursuit of output increases is less justified, nor extended the definition to include social, economic and ethical parameters. This paper develops an approach to defining and measuring sustainable intensification on a regional basis. We test this approach using data from the Farm Account Data Network for a balanced panel of 42 beef farms within Scotland. Indicators of economic, ecosystem and social parameters are derived from this database and measured over the period 2000-2010. These variables are objectively weighted within an overall index using Positive Matrix Factorisation (PMF), a form of Factor Analysis which constrains results to positive loadings and offers less ambiguity with relation to rotation. We find little change in Scottish Beef farming with respect to Sustainable Intensification, which reflects both a policy which has not supported intensification or output expansion over this period, nor has it increased the economic, social or ecosystem sustainability over this period. We argue that regions should adopt a definition of sustainable intensification that i) is specific to the production trajectories of that region and offers clarity within estimation and measurement. The conceptualisation of sustainable intensification along these lines would, we recommend, allow key members of the food supply chain to develop specific solutions to avoid future projected problems in food production.
    Keywords: Sustainable Intensification, Scottish Cattle Farming, Positive Matrix Factorisation, Farm Management,
    Date: 2012
  18. By: Timilsina Raja Rajendra (ISFnet Inc.); Koji Kotani (International University of University)
    Abstract: A new paradigm in natural resource management has moved towards more decentralized mechanisms to reverse the degradation. One of such mechanisms is a marketable permits system (MPS). Although the properties of MPS have been studied and identified to be effective in controlled laboratory experiments, little is known about how MPS works in the real field setup. To fill the gap, this paper seeks to evaluate the effectiveness and potentials of MPS in the real forest conservation by implementing a framed field experiment. Shaktikhore, Nepal has been chosen for the experimental site, since farmers' livelihood there depends on forests and they are able to report their valuation of forestry from economic and environmental points of view. This experiment elicits economic valuation of local farmers for each unit of forestland, derives aggregate demand and supply of the permits, and with a uniform price auction (UPA), MPS field experiments were carried out to see equilibrium prices and efficiencies of the market. The results suggest that MPS is effective with high efficiency of 80% in the real field. For this success, UPA institution is identified to be the key element because (i) farmers with elementary education could understand and follow the rules of trading and (ii) they are induced to reveal their valuations of forestland through bids to buy and offers to sell. To our knowledge, this study is the first that designs and employs UPA institution under trader settings, showing the successful performance of such a MPS scheme in the real field of developing nations. Overall, our research suggests that MPS could be the effective policy option for "real" practice of natural resources management even with less administrative expertise, limited education and fewer resources to implement.
    Keywords: Uniform price auction, Marketable permits system, Framed eld experiment, Forest management
    Date: 2012–08
  19. By: Mapa, Dennis S.; Lucagbo, Michael; Garcia , Heavenly Joy
    Abstract: The high poverty incidence in the county is a concern that needs to be addressed by our policy makers. Official poverty statistics from the National Statistical Coordination Board (NSCB) shows that the reduction in poverty over the past two decades has been quite dismal from 38% in 1988 to 26% in 2009 or less than one percent reduction per year. Since poverty incidence has dynamic patterns, studies using official poverty data encounter difficulty because of limited number of data points. This study builds econometric models in analyzing the movement of poverty in the country using the quarterly self-rated poverty series of the Social Weather Stations. The first model uses Markov Switching to determine the states of poverty. It assumes two states: high and moderate states of poverty. A high 61% of the population considered themselves as poor when the country is in the state of high poverty. In times of moderate poverty, 49.5% of the population considered themselves as poor. The result shows that once the country is in the state of high poverty, it stays there for an average of 24 quarters, or six years, before moving out. The paper then builds a logistic regression model to show what determines the states of high poverty. The model shows that a one-percent increase in agricultural output in the previous quarter reduces the probability of being in the high state of poverty by about 8 percentage points, all things being the same. The study shows that poverty incidence in the country is dynamic and frequent monitoring through self-rated poverty surveys is important in order to assess the effectiveness of the government programs in reducing poverty. The self-rated poverty surveys can complement the official statistics on poverty incidence.
    Keywords: Markov Switching; Logistic Regression; Self-Rated Poverty
    JEL: C53 I38 C22 I32 Q10
    Date: 2012–08

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