nep-dev New Economics Papers
on Development
Issue of 2018‒08‒13
fifteen papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. Rainfall shocks and risk aversion: Evidence from Southeast Asia By Liebenehm, Sabine; Degener, Nele; Strobl, Eric
  2. How Do Migration and Remittances Affect Inequality? A Case Study of Mexico By Zsoka Koczan; Franz Loyola
  3. Return Migrants’ Self-selection: Evidence for Indian Inventor By Stefano Breschi; Francesco Lissoni; Ernest Miguelez
  4. Storage infrastructure and agricultural yield: Evidence from a capital investment subsidy scheme By Chatterjee, Somdeep
  5. Rural-urban migration, welfare and employment: Comparing results from Thailand and Vietnam By Grote, Ulrike; Waibel, Hermann
  6. Stimulant or depressant? Resource-related income shocks and conflict By Gehring, Kai; Langlotz, Sarah; Kienberger, Stefan
  7. Decoupled but not neutral: The effects of stochastic transfers on investment and incomes in rural Thailand By Wagener, Andreas; Zenker, Juliane
  8. Comparing peri-urban versus rural poverty and child malnutrition reduction: Insights from Southeast Asia By Pahlisch, Thi Hoa; Parvathi, Priyanka; Waibel, Hermann
  9. Age-Profile Estimates of the Relationship Between Economic Growth and Child Health By Joseph Cummins; Anaka Aiyar
  10. Can Network Theory-based Targeting Increase Technology Adoption? By Lori Beaman; Ariel BenYishay; Jeremy Magruder; Ahmed Mushfiq Mobarak
  11. Volcanic hazards, land and labor By Johanna Choumert; Pascale Phelinas
  12. How Sensitive is Regional Poverty Measurement in Latin America to the Value of the Poverty Line? By Andrés Castañeda; Santiago Garriga; Leonardo Gasparini; Leonardo Lucchetti; Daniel Valderrama
  13. Climate Variability and Theft in Colombia By Rafael Isidro PARRA-PEÑA S; Barry REILLY
  14. Child Marriage and Infant Mortality: Evidence from Ethiopia By J. García-Hombrados
  15. Risk attitudes, knowledge, skills and agricultural productivity By Pham, Huong Dien; Waibel, Hermann

  1. By: Liebenehm, Sabine; Degener, Nele; Strobl, Eric
    Abstract: Empirical studies advocating the temporal variability of risk attitudes suggest that adverse covariate shocks significantly alter risk attitudes over time, but there is no consensus on the direction. In this paper, we investigate whether risk aversion increases or decreases in response to shocks. To do so, we combine individual-level panel data with historical rainfall data for rural Thailand and Vietnam. Our econometric analysis shows that temporal variability in risk attitudes is driven by rainfall shocks. Both severe shortages and excesses appear to increase individuals’ risk aversion. Contrary to expectations, we find that this impact is lower for farmers than for non-farmers. We can explain this result by the heterogeneous composition of non-farmers and by farmers’ ability to mitigate rainfall shocks. Our findings have potentially important implications especially for developing countries in that adverse shocks can increase poor people’s risk aversion and may lead to decisions that perpetuate their lives in poverty.
    Keywords: Rainfall, Risk attitudes, Risk mitigation
    JEL: C23 D9 Q54
    Date: 2018–04
  2. By: Zsoka Koczan; Franz Loyola
    Abstract: The poverty-reducing effects of remittances have been well-documented, however, their effects on inequality are less clear. This paper examines the impact of remittances on inequality in Mexico using household-level information on the receiving side. It hopes to speak to their insurance role by examining how remittances are affected by domestic and external crises: the 1994 Mexican Peso crisis and the Global Financial Crisis. We find that remittances lower inequality, and that they become more pro-poor over time as migration opportunities become more widespread. This also strengthens their insurance effects, mitigating some of the negative impact of shocks on the poorest.
    Date: 2018–06–14
  3. By: Stefano Breschi; Francesco Lissoni; Ernest Miguelez
    Abstract: Based on an original dataset linking patent data and biographical information for a large sample of US immigrant inventors with Indian names and surnames, specialized in ICT technologies, we investigate the rate and determinants of return migration. For each individual in the dataset, we both estimate the year of entry in the United States, the likely entry channel (work or education), and the permanence spell up to either the return to India or right truncation. By means of survival analysis, we then provide exploratory estimates of the probability of return migration as a function of the conditions at migration (age, education, patenting record, migration motives, and migration cohort) as well as of some activities undertaken while abroad (education and patenting). We find both evidence of negative self-selection with respect to educational achievements in the US and of positive self-selection with respect to patenting propensity. Based on the analysis of time-dependence of the return hazard ratios, return work migrants appear to be negatively self-selected with respect to unobservable skills acquired abroad, while evidence for education migrants is less conclusive.
    JEL: F22 O15 O31
    Date: 2018–07
  4. By: Chatterjee, Somdeep
    Abstract: In a developing economy, the availability of storage infrastructure is considered essential for two purposes; the reduction of post-harvest losses resulting in food shortage, and allowing for gains from inter-temporal trade due to potential arbitrage opportunities arising out of volatility in food grain prices. This paper provides empirical evidence on a lesser studied impact of storage infrastructure, viz, agricultural yield. The author exploits potentially exogenous variation generated by the intensity of access to a capital investment subsidy program for construction and renovation of rural godowns in India to identify causal effects of better storage on yield. He finds that the program led to an increase in rice yield by 0.3 tons per hectare, approximately a 20% increase compared to the baseline. A potential mediating channel for such an effect would be reduced storage costs facilitating better investments in productive inputs. As supportive evidence, the author finds that fertilizer consumption increased by 21% in response to the intervention.
    Keywords: storage,yield,fertilizer consumption,Grameen Bhandaran Yojana
    JEL: Q12 Q18 O12 O13
    Date: 2018
  5. By: Grote, Ulrike; Waibel, Hermann
    Abstract: This paper compares empirical findings on the motivation and welfare impacts of rural-urban migration from two comprehensive case studies conducted in Thailand and Vietnam. Panel data of around 4,000 rural households and tracking surveys of close to 1,000 migrants are used from the two countries. The studies find that outcomes depend to a large extent on the development status of the country. Rural households consider outmigration mostly as a livelihood support strategy. Given the scarcity of employment opportunities in the rural areas, migrants see themselves forced to look for jobs in the cities. Interestingly, most migrants perceive themselves to be better off in the cities. The rural households left behind benefit from migration as the remittances tend to have positive income growth effects. The research confirms the calls for improved social protection for migrants in urban areas and for quality schooling in the rural areas.
    Keywords: Migration, Poverty, Livelihoods, Employment quality, Vietnam, Thailand
    JEL: O15 Q56 R23
    Date: 2017–04
  6. By: Gehring, Kai; Langlotz, Sarah; Kienberger, Stefan
    Abstract: We provide new evidence about the mechanisms linking resource-related income shocks to conflict. To do so, we combine temporal variation in international drug prices with new data on spatial variation in opium suitability to examine the effect of opium profitability on conflict in Afghanistan. District level results indicate a conflict-reducing effect over the 2002-2014 period, both in a reduced-form setting and with three different instrumental variables. We provide evidence for two main mechanisms. First, the importance of contest effects depends on the degree of violent group competition over valuable resources. By using data on the drug production process, ethnic homelands, and Taliban versus pro-government influence, we show that on average group competition for suitable districts is relatively low in Afghanistan. Second, we highlight the role of opportunity costs by showing that opium profitability positively affects household living standards, and becomes more important after a sudden rise in unemployment due to the dissolution of large armed militias after an exogenous policy change.
    Date: 2018–07–20
  7. By: Wagener, Andreas; Zenker, Juliane
    Abstract: In 2009, the Thai government implemented a price insurance scheme for rice farmers. The program, which was abandoned after only one year, added to the incomes of registered farmers a non-negative but stochastic amount that was decoupled from farmers' agricultural activities. A rich panel data set spanning from 2008 to 2013 enables us to control for self-selection into the program and to study its impact on small-scale rice farmers in relatively poor Northeastern Thailand. Program participation increases rice production but also leads to shifts in the composition of income generating activities away from agriculture, which may be beneficial for rural development. Decreasing risk-aversion and relieved credit constraints may be possible channels for these effects.
    Keywords: Cash transfers, Agricultural subsidies, Farm households, Thailand, Propensity score matching
    JEL: D13 H25 I38 Q12
    Date: 2018–07
  8. By: Pahlisch, Thi Hoa; Parvathi, Priyanka; Waibel, Hermann
    Abstract: Success in reducing monetary poverty in Southeast Asia does not fully translate into reduction in malnutrition. Using a three-year panel data from one province each in Thailand, Lao PDR and Vietnam, we study the correlation between monetary poverty and nutritional outcomes of children under five. Furthermore, we analyze differences between nutrition outcomes of children between rural and peri-urban areas. We apply ordinary least squares, two stage least squares and quantile regression models and find that nutrition remains a problem despite achievements in poverty alleviation. Results also show significant differences across countries as well as between peri-urban and rural areas.
    Keywords: Poverty, Child malnutrition, Peri-urban, Rural, Southeast Asia
    JEL: I15 I30 R11
    Date: 2017–12
  9. By: Joseph Cummins (Department of Economics, University of California Riverside); Anaka Aiyar
    Abstract: Based largely on the analysis of the same underlying data, recently published papers have presented estimates that the association between economic growth and child undernutrition in developing countries is either strong and robust, or weak to nonexistent. We provide clarity on both the magnitude of the association and the underlying econometric problem. Focusing on child growth faltering as a process that unfolds over the first several years of life, we provide new evidence tracing out the relationship between macroeconomic trends and the trajectory of child growth through age 5. Using two novel regression models that each harness different kinds of within- and between-country variation, and data on over 600,000 children from 38 countries over more than 20 years, our estimates of the association are small but precise, and are consistent across both estimators. We estimate that a $10\%$ increase in GDP around the time of a child's birth is associated with a decrease in the rate of loss of HAZ of about 0.002sd per month over the first two years of life. This generates a cumulative effect of around 0.04sd by a child's third birthday and the magnitude of the correlation largely persists through age 5. Our models are derived from both economic and biological theory and provide a new empirical framework for researchers interested in investigating the ecological-level determinants of child growth.
    Keywords: anthropometrics; child health; economic growth;
    JEL: I15 J13 O15
    Date: 2017–10
  10. By: Lori Beaman (Northwestern University); Ariel BenYishay (College of William and Mary); Jeremy Magruder (UC-Berkeley); Ahmed Mushfiq Mobarak (Cowles Foundation, Yale University)
    Abstract: In order to induce farmers to adopt a productive new agricultural technology, we apply simple and complex contagion diffusion models on rich social network data from 200 villages in Malawi to identify seed farmers to target and train on the new technology. A randomized controlled trial compares these theory-driven network targeting approaches to simpler strategies that either rely on a government extension worker or an easily measurable proxy for the social network (geographic distance between households) to identify seed farmers. Our results indicate that technology diffusion is characterized by a complex contagion learning environment in which most farmers need to learn from multiple people before they adopt themselves. Network theory based targeting can out-perform traditional approaches to extension, and we identify methods to realize these gains at low cost to policymakers.
    Date: 2018–08
  11. By: Johanna Choumert (EDI - Economic Development Initiatives Limited); Pascale Phelinas (CESSMA UMRD 245 - Centre d'études en sciences sociales sur les mondes africains, américains et asiatiques - IRD - Institut de Recherche pour le Développement - Inalco - Institut National des Langues et Civilisations Orientales - UPD7 - Université Paris Diderot - Paris 7, CERDI - Centre d'Études et de Recherches sur le Développement International - Clermont Auvergne - UCA - Université Clermont Auvergne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: We study the behavior of farmers living under the threat of the Tungurahua Volcano in Ecuador. Recent eruptions have caused significant damage, including crop loss, death of livestock, and destruction of dwellings. We collected a unique data set after a major eruption in 2016. We interviewed 222 farmers in the area affected by the eruption and 260 in a nearby control zone to understand why they choose to remain in the risky zone despite the existence of public programs aimed at relocating them to safe zones. We examine land and labor, which are farmers' primary productive assets. Firstly, we investigate the capitalization of volcanic hazards in farmland values and find a negative price premium of 21% compared to the control zone. Secondly, we explore non-farm labor in response to volcanic risk. Finally, we argue that repeated ash fall events increase the illiquidity of farm household assets, such as farmland, and that agricultural human capital is difficult to convert into non-agricultural capital. Our results convey important information for public policies aimed at supporting adaptation and resilience of people living under the threat of volcanoes and other natural disasters.
    Keywords: Ecuador, Volcano, Agriculture, Labor, Natural disasters
    Date: 2018–07–20
  12. By: Andrés Castañeda (World Bank); Santiago Garriga (Paris School of Economics - École des hautes études en sciences sociales); Leonardo Gasparini (CEDLAS-FCE-UNLP and CONICET); Leonardo Lucchetti (World Bank); Daniel Valderrama (Georgetown University – Department of Economics)
    Abstract: This paper contributes to the methodological literature on the estimation of international poverty lines for Latin America based on the official poverty lines chosen by the Latin American governments and commonly used in the public debate. The paper exploits a comprehensive data set of 86 up-to-date official extreme and total urban poverty lines across 18 countries in Latin America, as well as the recently updated values of the national purchasing power parity conversion factors from the 2011 International Comparison Program, and a set of harmonized household surveys. By using 3 and 6 US dollars per person a day at 2011 PPP as the extreme and total poverty lines for Latin America, this paper illustrates the sensitiveness of poverty rates to changes of the values of the poverty lines as a result of the recent update of the PPP values, the period of reference, and the relative cost of living across the countries in the region. The poverty lines with the 2011 PPP values lead to an increase in total poverty rates in Latin America when compared to the 2005 PPP values, while they leave the extreme poverty rate unaffected. In general, country-specific poverty rankings remain fairly stable to the values of the poverty lines selected.
    JEL: I3 I32 D6 E31 F01
    Date: 2018–08
  13. By: Rafael Isidro PARRA-PEÑA S; Barry REILLY
    Abstract: The objective of this study is to estimate the causal impact of the most recent extreme weather event (EWE) in Colombia (‘La Niña’ between 2010-2011), labelled as the ‘winter wave’ by the local media, on persons, houses, business and car theft rates in municipalities subject to the treatment of this EWE. Using a novel annual municipal panel dataset (2007-2012, inclusive), and measuring the affected areas according to the number of houses damaged and destroyed, this study relies on a Difference-in-Difference (D-i-D) model to show that the concurrent year of the winter wave brought a decrease in theft rates, especially, theft from persons. This may be perhaps attributable to the emergence of pro-social behaviour in the municipalities most affected. We also find an increase in theft from houses possibly linked to a ‘survival mechanism’, rather than one that one that seeks reward like the type the BECKER (1968) model of crime and punishment. In addition, the D-i-D estimates also reveal that the presence of conflict, in general, discourages theft perhaps due to the establishment of coercive institutions by illegal armed groups.
    Keywords: Natural Disasters, Environmental Economics, Violence, Crime, Weather, Climate Variability, and Climate Change
    JEL: I3 O1 P48 Q51 Q54
    Date: 2018–07–03
  14. By: J. García-Hombrados
    Abstract: This study uses age discontinuities in exposure to a law that raised the legal age of marriage for women in Ethiopia to investigate the causal link between child marriage and infant mortality. Using a fuzzy regression discontinuity design, the study shows that laws banning underage marriages could be an effective strategy to tackle child marriage and decrease infant mortality; and estimates that a oneyear delay in women’s age at cohabitation during teenage years causally reduces the probability of infant mortality of the first born by 3.8 percentage points. The impact of child marriage on infant mortality seems to be closely linked to the effect of delaying cohabitation on the age of women at first birth.
    Date: 2018–07
  15. By: Pham, Huong Dien; Waibel, Hermann
    Abstract: Agriculture is a risky business contingent on risks and uncertainty. Without strong technical knowledge, farmers tend to rely heavily on heuristics and subjective judgments to deal with their daily business. It is crucial to understand farmers’ practices to provide suitable supports. This study uses a rich data set from a long panel household survey to assess farmers’ agricultural productivity in Hue province of Vietnam that we combine with data collected from special surveys conducted in 2014 and 2015 focusing on farmers’ knowledge, skills and risk attitudes. It aims to provide an overview of the environment in which farmers do business under constraints. Particularly, we investigate the relations among risk attitudes, farmers’ knowledge, management ability and agricultural productivity by using univariate and bivariate analyses. The results indicate a large variation in farmers’ knowledge. Most of them have low degree of technical knowledge, but show higher subjective knowledge. Agricultural performance tends to be more dependent on subjective knowledge than technical knowledge. Accordingly, farmers received limited support from the extension institutions. While risk attitudes are significantly correlated with farmers’ knowledge and decision-making ability in livestock production, it has no direct significant relation with agricultural performance. The previous outcome showed that livestock productivity is prone to fluctuation, risk-taking should be important for farmers to cope with shocks. This study suggests extension services to fill the gap between subjective knowledge and technical knowledge and to build a significant linkage between risk-taking and learning to improve farmers’ abilities and consequently enhance agricultural productivity.
    Keywords: Agriculture, Knowledge, Risk attitudes
    JEL: D81 Q00 Q10
    Date: 2018–04

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