nep-dev New Economics Papers
on Development
Issue of 2016‒04‒04
fourteen papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. Why did poverty decline in India ? a nonparametric decomposition exercise By Balcazar Salazar,Carlos Felipe; Desai,Sonal; Murgai,Rinku; Narayan,Ambar
  2. Do flexible repayment schedules improve the impact of microcredit? Evidence from a randomized evaluation in rural India By Czura, Kristina
  3. Revisiting the impact of the Brazilian SIMPLES program on firms'formalization rates By Piza,Caio
  4. The Effects of Market Participation on Farm Households’ Food Security in Cambodia: An endogenous switching approach By Seng, Kimty
  5. Women’s empowerment in agriculture and dietary diversity in Ethiopia: By Yimer, Feiruz; Tadesse, Fanaye
  6. Estimating international poverty lines from comparable national thresholds By Jolliffe,Dean Mitchell; Prydz,Espen Beer
  7. Communal Land and Agricultural Productivity By Charles Gottlieb; Jan Grobovsek
  8. An update of the Philippine conditional cash transfer?s implementation performance By Acosta,Pablo Ariel; Velarde,Rashiel Besana
  9. Absence of Altruism? Female Disadvantage in Private School Enrolment in India By Maitra, Pushkar; Pal, Sarmistha; Sharma, Anurag
  10. Intergenerational mobility and the rise and fall of inequality: Lessons from Latin America By Neidhöfer, Guido
  11. Gender differences in climate change perceptions and adaptation strategies: an intra-household analysis from rural Kenya By Ngigi, Marther W.; Mueller, Ulrike; Birner, Regina
  12. Market Access, Welfare, and Nutrition: Evidence from Ethiopia: By Stifel, David; Minten, Bart
  13. Analyses of enrolment, dropout and effectiveness of RSBY in northern rural India By Raza, Wameq; van de Poel, Ellen; Panda, Pradeep
  14. Foods and Fads - The Welfare Impacts of Rising Quinoa Prices in Peru By Marc F. Bellemare; Johanna Fajardo-Gonzalez; Seth R. Gitter

  1. By: Balcazar Salazar,Carlos Felipe; Desai,Sonal; Murgai,Rinku; Narayan,Ambar
    Abstract: This paper uses panel data to analyze factors that contributed to the rapid decline in poverty in India between 2005 and 2012. The analysis employs a nonparametric decomposition method that measures the relative contributions of different components of household livelihoods to observed changes in poverty. The results show that poverty decline is associated with a significant increase in labor earnings, explained in turn by a steep rise in wages for unskilled labor, and diversification from farm to nonfarm sources of income in rural areas. Transfers, in the form of remittances and social programs, have contributed but are not the primary drivers of poverty decline over this period. The pattern of changes is consistent with processes associated with structural transformation, which add up to a highly pro-poor pattern of income growth over the initial distribution of income and consumption. However, certain social groups (Adivasis and Dalits) are found to be more likely to stay in or fall into poverty and less likely to move out of poverty. And even as poverty has reduced dramatically, the share of vulnerable population has not.
    Keywords: Services&Transfers to Poor,Inequality,Pro-Poor Growth,Rural Poverty Reduction
    Date: 2016–03–15
  2. By: Czura, Kristina
    Abstract: Microcredit institutions typically apply rigid and fixed repayment schedules when disbursing loans in order to reduce transaction costs, simplify procedures, and inculcate fiscal discipline for better repayment behavior. Microcredit clients, however, often have neither smooth income nor singular moments in which to make lumpy investments throughout the year. This mismatch generates a cash flow disconnect and, given the presumed liquidity constraints of the typical microcredit client, a potential welfare loss. Using data from a randomized evaluation with dairy farmers in rural India, we test the impact of flexible microcredit repayment schedules relative to "normal" inflexible, fixed repayment schedules. Although we are only able to track those who borrow, which introduces potential selection effects, we find amongst those in flexible lending groups some evidence for higher ability to absorb shocks and higher income, which seems to be driven by limited improvements in investment and higher production from milk. On the cost-side, defaults do increase for the lender. Towards the end of the study, the microcredit market encountered crisis, with mass defaults, thus it is hard to generalize with respect to the default results. We conclude with caution, that we have shown suggestive evidence that a more flexible product design, one tailored to the needs of a dairy farmer, may be welfare enhancing for the dairy farmer. Further work is needed to both validate these results, and explore how to balance any trade-off with default.
    Keywords: Flexible repayment schedules; micro finance; microcredit; consumption smoothing
    JEL: O16 Q14
    Date: 2015–11
  3. By: Piza,Caio
    Abstract: A recent survey of rigorous impact evaluations of programs to help small and medium-size firms to formalize indicates that the programs do not seem to work for most informal firms. One of the few exceptions finds large effects of a tax simplification program in Brazil called SIMPLES on firms'formalization rates and performance indicators. Using the same data set but a different identification strategy, another study concludes that the program had limited effect on formalization rates. The aim of this paper is twofold. First, it revisits the two studies to reconcile their conflicting conclusions. Second, it investigates the validity of the identification strategy of both studies. The findings suggest that the conflicting results between the two studies are caused by the dates each used to identify when the program was put into effect. A robustness check indicates that data heaping and seasonality around November cast doubts on the identification strategy used in both studies to estimate the effect of this particular program.
    Keywords: E-Business,Science Education,Microfinance,Small Scale Enterprises,Scientific Research&Science Parks
    Date: 2016–03–16
  4. By: Seng, Kimty
    Abstract: This paper evaluates the effects of market participation on farm households’ food security in rural Cambodia in terms of household dietary diversity score. The evaluation is carried out with an endogenous switching model built on data from the Cambodia Socio-Economic Survey conducted in 2009. This model accounts for selection bias arising from unobserved factors that potentially affect both the participation and food security. The model also controls for structural differences between participants and nonparticipants in markets in terms of food security functions. The results reveal that by participating in markets, farm households enjoy higher household dietary diversity score, thus confirming the hypothesis that participation in markets exerts positive effects on farm households’ food security.
    Keywords: market participation, farm households, food security, endogenous, rural Cambodia
    JEL: O12 O13 Q02
    Date: 2016–03–15
  5. By: Yimer, Feiruz; Tadesse, Fanaye
    Abstract: Intra-household resource allocation has a considerable role to play in nutritional status in developing countries. Maternal and children’s dietary diversity are linked, not only with the circumstances of the household in general, but also with the status of women in particular. The extent to which women have access to and control over re-sources largely determines the kind of care they provide for their children and for the rest of the household. As recognized by the National Nutrition Program, women’s lack of control over household resources, time, knowledge, and social support networks constitutes a major barrier to improving poor nutritional outcomes in Ethi-opia. Using household survey data from 2013, we investigate the impact of women’s empowerment in agriculture on the nutrition outcomes of children and women. The data were collected in five regions of the country from more than 7,000 households in 84 woredas. We use multivariate regression methods and instrumental variable tech-niques to establish the relationship between women’s empowerment and the dietary diversity of women and chil-dren. The results indicate that all of the women’s empowerment indicators used are positively related to better die-tary diversity for both children and women. As women’s empowerment leads to improvements in children’s and women’s dietary diversity, it follows that interventions which increase women’s empowerment contribute to im-proving child nutrition as well as their own well-being.
    Keywords: gender, women, agriculture, diet,
    Date: 2015
  6. By: Jolliffe,Dean Mitchell; Prydz,Espen Beer
    Abstract: World Bank's international poverty line of $1.90/day, at 2011 purchasing power parity, is based on a collection of national poverty lines, which were originally used to set the international poverty line of $1.25/day at 2005 purchasing power parity. This paper proposes an approach for estimating a more recent, complete, and comparable collection of national poverty thresholds from reported national poverty rates. The paper presents a set of international poverty lines based on this new database of national poverty lines. In contrast to the lines used to estimate the $1.90 international poverty line, this approach produces national poverty lines that are (1) consistent with national poverty rates, (2) expressed in common units, and (3) provide greater support to the estimated international poverty line. These national poverty lines are used to estimate an extreme international poverty line, and three higher lines that are more relevant for higher-income countries. A key finding provides evidence of the robustness and relevance of the $1.90 international poverty line as a measure of extreme poverty for low-income countries.
    Keywords: Regional Economic Development,Services&Transfers to Poor,Pro-Poor Growth,Rural Poverty Reduction
    Date: 2016–03–17
  7. By: Charles Gottlieb; Jan Grobovsek
    Abstract: This paper quantifies the aggregate impact of communal land tenure arrangements that prevail in Sub-Saharan Africa. Such tenure regimes limit land transferability by prohibiting sales, subjecting rented-out land to the risk of expropriation, and redistributing it to existing farmers in a progressive fashion. We use a general equilibrium two-sector selection model featuring agents heterogeneous in skills to compute the resulting occupational and operational choices as well as land allocations. The quantification of the model is based on policies deduced from Ethiopia. In the Sub-Saharan African context we find that such policies substantially dampen nominal agricultural relative to non-agricultural productivity, by 25%. Real relative agricultural productivity, however, only falls by 4% since cross-sectoral terms of trade adjust strongly, with excess agricultural employment only amounting to some 1.5 percentage points. The loss in GDP is small, about 2%. That serves as a reminder that ostensibly highly distortionary policies need not have substantial bite when individuals strategically adjust to them and equilibrium prices adapt. For example, the model predicts that at given prices 62% of farmers in an economy such as Ethiopia would leave farming if tenure were secured, casting land insecurity as a major obstacle. Yet only 9% would actually switch sectors after price adjustments are factored in.
    Keywords: Agricultural Productivity, Growth and Development, Misallocation, Land
    JEL: O10 O13 O40 O55 Q15
    Date: 2015–02–03
  8. By: Acosta,Pablo Ariel; Velarde,Rashiel Besana
    Abstract: The Pantawid Pamilyang Pilipino Program (Pantawid Pamilya) is the Philippines? national conditional cash transfer (CCT) program. The program provides cash grants to poor households that have limited capacity to invest in their children?s future and well-being. This note is the second benefit incidence analysis of the Philippines? conditional cash transfer program conducted by a World Bank team that uses standard measures to assess the implementation performance of the Pantawid Pamilyang Pilipino Program. The authors show that despite the program?s rapid expansion since it was piloted in 2007, it maintains good targeting accuracy, progressivity, and costefficiency in delivering assistance to the poor. The authors also show that Pantawid Pamilya helps reduce short term poverty by closing the income gap of beneficiary households by up to 7.4 percentage points, helping them afford their basic needs. Among beneficiaries, the program reduces food poverty and total poverty by up to 6.7 percentage points. To maintain the program?s relevance, adequacy of assistance, sustained impact on beneficiary welfare, and adjustments in the benefit level and program coverage at a sustainable level are recommended.
    Keywords: Debt Markets,Health Systems Development&Reform,Health Monitoring&Evaluation,Poverty Monitoring&Analysis,Rural Poverty Reduction
    Date: 2015–10–31
  9. By: Maitra, Pushkar (Monash University); Pal, Sarmistha (University of Surrey); Sharma, Anurag (Monash University)
    Abstract: Using two nationally representative datasets from household surveys conducted in India in 2005 and 2012, the present paper examines the causal effect of gender in private school choice. We argue that the gender of the child is potentially endogenous in India because parents continue to have children until they have a son. To redress this potential endogeneity, we exploit the variation in private school choice among 7-18 year olds born to the same parents within the same household in an attempt to minimize both child-invariant and child-varying household-level omitted variable bias. We then explore the nature of female (dis)advantage across different types of households, communities and years with a view to assess the role of parental preferences in this respect and also its change. Significant female disadvantage exists in both survey years, though the size of this disadvantage varies across sub-samples and years. Female disadvantage is significantly higher among younger (relative to eldest) girls and also in northern and northwestern (relative to western) regions, but it is lower among girls from poor (relative to rich) households, Christian (relative to Hindu high caste) households, and those with more educated mothers. We infer that the observed within-household variations in female disadvantage across sub-samples reflect variations in non-altruistic parental preferences linked to deeply held cultural norms (for example, sons acting as old-age security and the exogamy of girls), access to schools and other public goods, thus posing considerable challenges to securing 'education for all.'
    Keywords: private school enrolment, female disadvantage, parental altruism, household fixed-effects model, India
    JEL: C21 I25 O10
    Date: 2016–03
  10. By: Neidhöfer, Guido
    Abstract: Countries with high income inequality also show a strong association between parents´ and children´s economic well-being; i.e. low intergenerational mobility. This study is the first to test this relationship in a between and within country setup, using harmonized micro data from 18 Latin American countries spanning multiple cohorts. It is shown that experiencing higher inequality in childhood has a negative effect on intergenerational mobility as adults. Furthermore, the influence of economic growth and public education is evaluated: both have a positive, significant, and substantial effect on intergenerational mobility.
    Keywords: inequality,intergenerational mobility,equality of opportunity,human capital,growth,development,public education,Great Gatsby Curve,Latin America
    JEL: D63 I24 J62 O15
    Date: 2016
  11. By: Ngigi, Marther W.; Mueller, Ulrike; Birner, Regina
    Abstract: It has been widely acknowledged that the effects of climate change are not gender neutral. However, existing studies on adaptation to climate change mainly focus on a comparison of male-headed and female-headed households. Aiming at a more nuanced gender analysis, this study examines how husbands and wives within the same household perceive climate risks and group-based approaches as coping strategies. The data stem from a unique self-collected and intra-household survey involving 156 couples in rural Kenya, where husbands and wives were interviewed separately. Options for adapting to climate change closely interplay with husbands’ and wives’ roles and responsibilities, social norms, risk perceptions and access to resources. Consequently, a higher percentage of wives adopt crop-related strategies, whereas husbands employ livestock- and agroforestry-related strategies. Besides, there are gender-specific climate information needs, gendered trust of information and preferred channels of information dissemination. Further, it turned out that group-based approaches benefit husbands and wives differently. Group-based approaches provide avenues for diversifying livelihoods and managing risks for wives, while they are pathways for sharing climate information and adaptation options for husbands. Social groups help husbands and wives to enhance their welfare through accumulating vital types of capital such as livestock, durable assets, human, natural, financial and social capital. The findings suggest that designing gender-sensitive policies and institutionalizing gender in climate change adaptation and mitigation frameworks, are vital. Policy interventions that rely on group-based approaches must reflect gender perspectives on the ground in order to amplify men’s and women’s specific abilities to manage risks and improve welfare outcomes in the wake of accelerating climate change.
    Keywords: perceptions, adaptation, group-based approaches, gender, intra-household analysis, Kenya, Consumer/Household Economics, Environmental Economics and Policy, Farm Management, Food Consumption/Nutrition/Food Safety, D13, J16, Q54,
    Date: 2016–03
  12. By: Stifel, David; Minten, Bart
    Abstract: We estimate the impact of improved market access on household well-being and nutrition using a quasi-experimental setting in Ethiopia. We find that households in remote areas consume substantially less than households nearer to markets, they are more food insecure, and their school enrollment rates are lower. Although their diets are also less diverse, we find no significant differences in anthropometric measures. Part of these welfare differences can be attributed to lower household agricultural production in remote areas. But agricultural production differences alone do not account for all of the differences in household consumption levels for remote households. An additional contributing factor is the deteriorating terms of trade for remote households that negatively affects both the size of the agricultural surplus that these households market and the quantity of food items that they purchase. Reducing transaction costs associated with poor rural infrastructure can pay off important dividends as it can facilitate households’ abilities to transform marketed surpluses into consumption goods and into healthier, more diverse diets.
    Keywords: welfare, food security, nutrition, food consumption, rural areas, poverty, market access, trade,
    Date: 2015
  13. By: Raza, Wameq; van de Poel, Ellen; Panda, Pradeep
    Abstract: In 2008, the Government of India initiated the Rashtriya Swasthya Bima Yojana (RSBY) to provide inpatient insurance coverage to all below-poverty-line (BPL) households in India. It is one of the most ambitious social protection programmes in the country. Using household level panel data from Uttar Pradesh and Bihar collected in 2012-2013, this paper investigates the determinants of enrolling in and dropping out of the scheme. In addition, we investigate whether participating in the RSBY is associated with a higher probability of using inpatient care and increased financial protection. We find that by the end of our survey period, close to half of our sample is enrolled in RSBY (41% in Bihar, 68% in UP). RSBY coverage is more concentrated among the poor in Bihar, as compared to UP. We find that the presence of chronic illnesses, lower socioeconomic status, belonging to scheduled-castes or tribes (SCST), insurance related awareness and proximity to healthcare facilities are positively correlated with enrolment. SCST households and households with members who have chronic conditions are less likely to drop out. The associations between RSBY membership and healthcare use and financial protection vary across the states. While we do not find that RSBY is associated with increased rates of utilization across the board, we do find insured households in Bihar experience lower out-of-pocket payments and debt following hospitalization. Nearly all hospitalizations among insured patients lead to positive OOP spending. Overall, we conclude that though the RSBY does appear to be pro-poor and is inclusive of disadvantaged minorities such as the SCST, the scheme suffers from adverse selection. The fact that drop-out rates are low might suggest good perceived value for the insured. The RSBY has the potential to play an important role in India’s move towards Universal Health Coverage. However, our analyses suggests that scheme awareness should be increased; that the targeting of the scheme could be improved, and that the programme is not yet providing cashless inpatient care. The differences in effectiveness between both states might be related to the recent development efforts made by the Bihar government, and suggestive of the need for addressing supply side constraints prior to launching an insurance scheme.
    Keywords: RSBY, health insurance, India, enrolment, dropout, renewal, impact, rural
    JEL: D71 I1 I13 I38
    Date: 2016–01
  14. By: Marc F. Bellemare (Department of Applied Economics, University of Minnesota); Johanna Fajardo-Gonzalez (Department of Applied Economics, University of Minnesota); Seth R. Gitter (Department of Economics, Towson University)
    Abstract: Riding on a wave of interest in "superfoods" in rich countries, quinoa went in less than a decade from being largely unknown outside of South America to being an upper- class staple in the United States. As a consequence of that rapid rise in the popularity of quinoa, the price of quinoa tripled between 2006 and 2013. We study the impacts of rising quinoa prices on the welfare of Peruvian households. Using 10 years of a large-scale, nationally representative household survey, we combine pseudo- panel and difference-in- differences methods to look at the relationship between (i) the purchase price of quinoa and the value of household consumption, which we use here as a proxy for household welfare, and (ii) household quinoa production and household welfare. We find that increases in the purchase price of quinoa are associated with a significant increase in the welfare of the average household in areas where quinoa is consumed, which suggests that the quinoa price increase has had general equilibrium effects extending to non-producers. We also find that quinoa production is associated with a faster rate of growth of household welfare, but only at the height of the quinoa price boom. Our findings are robust to a number of different specifications.
    Keywords: Quinoa, Commodity Price Shocks, Household Welfare, Peru.
    JEL: O12 Q12
    Date: 2016–03

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