MOSP - Macao Scientific Publishers

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The dynamic relationship among poverty, inequality, and growth in rural Ethiopia: A micro evidence

Fekadu Gelaw

Abstract: The Ethiopian government has boldly set very rapid and sustainable growth and its equitable distribution as its prime development objective to end poverty in the foreseeable future. For this reason, promoting agricultural and rural development has been purported by the government as its top development agenda since it took power some 19 years back. Yet the extent to which the government realizes this objective remains in doubt. This paper attempts to analyze the dynamic relationships among poverty, inequality and growth. While many of the available studies use aggregate cross-country data sets, this study, however, uses household panel data-set. The decomposition result indicates that the observed growth was neither rapid nor sustainable. Poverty and inequality have not also declined considerably except between 1995 and 1997. The study also systematically generated 90 observations of indices from the five rounds to estimate Fixed Effect (FE) regression model. The estimated growth and inequality elasticities of poverty were found equal to 3.32 and -3.68, respectively. What this means is that poverty could still remain high if the country fails to achieve rapid and sustainable growth, on the one hand, and simultaneously reduce inequality, on the other.[...] Read More.

Keywords: Inequality, poverty, growth, fixed effects.

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Real and conditional convergence in Africa: The case of the Franc zone Countries

Latif Dramani

Abstract: Using the convergence theory inspired by models of endogenous growth, this paper analysed convergence in the economies of the Franc Zone countries in Africa. With an econometric validation based on cross-sectional and panel data, the paper tested a number of hypotheses, the main ones being the convergence of the economies of the UEMOA and CEMAC zones through per capita income, the existence of spillover effects, as well as the search for a common growth path for the economies of the two zones. The study’s findings show that the convergence process, and hence that of integration has not been carried out uniformly in the Franc Zone: the process has been given greater emphasis in UEMOA than in CEMAC. Further, the conditional convergence model highlights the existence of key variables that help to maximize the convergence speed. A more refined convergence approach, which used similarities related to production factors and those related to natural advantages highlight the presence of a convergence club. The study found a period-related convergence in the cotton-producing countries, coffee-producing countries and coastal countries. This shows that the hypothesis of a common convergence path in the Franc Zone has not been borne out by our study.[...] Read More.

Keywords: Beta convergence, stochastic convergence, panel data, cointegration, economic integration.

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The real exchange rate and growth in Malawi: Exploring the transmission route

Abstract: This study focuses on the impact of real exchange rate on savings rate and economic growth. It further explores the savings transmission mechanism through which such a link can take place in the country. The results show that real effective exchange rate (REER) volatility has adverse effects on economic performance. Contextually, an appreciated REER is significantly and positively correlated with economic growth, reflecting Malawi’s net-importer position. On the other hand, REER volatility is significantly and negatively correlated with growth, reflecting investors’ preference for a stable exchange rate. With regard to savings, the study finds that appreciation of the REER (or nominal exchange rate) would encourage savings. The study also finds that devaluation of the REER has an insignificant effect on economic growth in the long-run. The negative impact of real exchange rate volatility on economic growth suggests that eliminating real exchange rate volatility can have strong growth-enhancing effects. Government has a variety of instruments at their disposal to influence the level, and reduce the volatility of the real exchange rate. The options include currency intervention (building up foreign exchange reserves) and eliminating institutional and market failures.[...] Read More.

Keywords: Malawi, real exchange rate, economic growth, transmission route.

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Effects of fertilizer liberalization on maize production in Nigeria

A. A. Ammani*, J. F. Alamu and T. M. Kudi

Abstract: The paper studies the effects of the liberalization of the Nigerian fertilizer sector, vis-à-vis the sustenance of the present dual fertilizer distribution arrangement, on maize production in Nigeria. Time series data was collected for the period 1990- 2006. A multiple regression model was specified with aggregate fertilizer use, maize hectarage and a dummy variable designed to capture the effects of the changes induced by fertilizer liberalization measure, as explanatory variables. Aggregate maize output was the dependent variable. Results of this study indicate that a significant decrease in aggregate maize production followed the Federal Government’s liberalization of the fertilizer sector in 1997. The statistically significant decrease in Maize production is attributable to the statistically significant decrease in fertilizer use during the fertilizer liberalization period. The paper concluded that the sustenance of the present dual fertilizer distribution arrangement has a negative effect on maize production in Nigeria.[...] Read More.

Keywords: Effects, fertilizer liberalization, maize production, Nigeria.

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Measuring agricultural productivity growth in Developing Eight

V. Shahabinejad* and A. Akbari

Abstract: In this paper the agricultural productivity growth in Developing Eight (D-8) from 1993 - 2007 is examined using the data envelopment analysis (DEA). The study focuses on growth in total factor productivity and its decomposition in to technical and efficiency change components. It was found that, during that period, total factor productivity has experienced a positive evolution in D-8. Decomposition of TFP shows that technical change is the main source of this growth. The study also describes that technical efficiency change has been the main constraint of achievement of high levels of total factor productivity. Also, findings in pure and scale efficiency change show that, the cause of the low efficiency is that, these countries have not succeeded well in expanding of agriculture sector of their economy. Finally it was found that, all D-8 countries improved technology more than efficiency in the reference period.[...] Read More.

Keywords: Total factor productivity (TFP), data envelopment analysis (DEA), developing Eight (D-8).

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Adoption of agro-forestry technologies among small-holder farmers: A case of Zimbabwe

C. Parwada*, C. T. Gadzirayi, W. T. Muriritirwa and D. Mwenye

Abstract: The objectives of this study were to assess and compare the levels of adoption of agro-forestry technologies between trained and untrained farmers, and identify specific factors that affect adoption of technologies. Data from 300 smallholder farmers selected by snowballing from villages where change agents had been trained by the International Center for Research in Agro Forestry was collected using structured questionnaires. The data were analyzed using the Statistical Package for the Social Science and Microsoft Office Excel. The results showed that there was low level of awareness of agro-forestry technologies among farmers. Formally trained farmers adopted agro-forestry technologies more than informally- trained farmers. Logit regression results showed that the likelihood to adopt live fence was influenced significantly by land ownership, awareness, training, drought, labour and local institutions (p[...] Read More.

Keywords: Adoption, agro-forestry technologies, change agents, logit regression.

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Truncation and endogenous stratification in various count data models for recreation demand analysis

Tomoaki Nakatani* and Kazuo Sato

Abstract: The aim of this paper is to extend the truncated and endogenously stratified Poisson and negative binomial models to three alternative discrete distributions, namely the generalized Poisson, geometric and Borel distributions. Our primary intention here is to demonstrate how the improper treatments of the data generate divergent outcomes by applying those results to the recreation trip data surveyed from the visitors to an indigenous horse park in Japan. Our empirical application shows that failure to account for overdispersion, truncation and endogenous stratification leads to substantial changes in parameter estimates and their standard errors. The parameter on the travel cost tends to be underestimated in absolute value in the standard setups. This induces serious overestimation of the economic benefit that the recreation site offers to the society. Even when the endogenous stratification is incorporated, ignoring the overdispersion estimates the per capita per trip consumer surplus over 7 times larger than the one obtained under the endogenous stratification and overdispersion.[...] Read More.

Keywords: Count data models, endogenous stratification, overdispersion, recreation demand analysis, consumer surplus.

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Determination of seasonal price variations for some food crops in Iran at Karaj zone to achieve Sustainable Agriculture

Behzad Sani* and Hossein Aliabadi Farahani

Abstract: Iran is one of the largest Asian countries with arid and semi-arid weather, but can produce most food crops due to special geographical position. In order to determine seasonal prices (SPV) variations in some food crops, this study was carried out at Karaj city of Iran in 2009. In this experiment, four groups of food products were used. The first group includes tree fruits (orange, apple and pomegranate), the second includes the kitchen garden fruits (watermelon, melon and cantaloupe), the third includes greenhouse fruits (banana, strawberry and pineapple) and the fourth group includes vegetables (tomato, potato and onion). Each of the above products price was determined in each season (spring, summer, autumn and winter) and were compared with one another by statistical graphs. The results showed that price variations were high in tree fruits, vegetables and kitchen garden fruits than the greenhouse fruits and demand of these products was very dependent on price variations. In the seasons, increase in product demand results to decrease in product price, while reduction in the product’s demand results to increase in product price; but greenhouse fruits prices were constant during the year and there were also constant demand for these products in all seasons. The results showed that the greenhouses production and processing food products can keep constant prices of food products throughout the year and remove the destructive role of brokers.[...] Read More.

Keywords: Seasonal price variations, food crops, sustainable agriculture.

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Do non-farm incomes really matter for poverty among small households in rural Bangladesh? A case of advanced villages

Mohammad Abdul Malek* and Koichi Usami

Abstract: Given the critical importance of the non-farm sector in rural Bangladesh, this paper examines the comprehensive effects of non- farm incomes on poverty reduction, namely, household production and consumption. The study was based on the original field survey with data from about 175 small households in advanced villages of Bangladesh. Standard micro-econometric techniques were used for the empirical analyses. The study found that the small households in advanced villages were in a stage that their non-farm incomes did not contribute significantly to their household production for either farm or non-farm and food consumption (calorie adequacy); and accordingly, these could be spent on non-food consumption. Finally, the study found that the overall non-farm income significantly mattered for reducing income poverty but could be still low to be realized in reducing education poverty. However, among the non-farm income components, while out-country remittance and non- farm self-employment incomes were more income poverty (incidence and gap) reducing compared to non-farm wage and in-country remittance incomes, the remittance incomes (both in-country and out-country) were reducing the severity of education poverty. Thus, the qualitative diversification of the small household workers and productive use (preferably in farm/non-farm production and demand driven education) of non-farm incomes deserved special attention.[...] Read More.

Keywords: Non- farm incomes, household economy, calorie adequacy, income poverty, education poverty, advanced villages, instrumental variable.

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Market liberalization and maize production in Nigeria

M. A. Badmus

Abstract: This study examined the impact of market liberalization on maize production in Nigeria. Time series data for a 29-year period (1970 - 1998) were collected. Zellner’s seemingly unrelated regression (SUR) model was used as the estimation technique. Output of maize was found to be more during liberalization. Fertilizer price and hectarage planted to maize were the significant variables affecting maize output. Fertilizer consumption was found to be affected by hectarage planted to maize and crop loan. Retail price of fertilizer was determined by the factory gate and world prices of fertilizer. For hectarage planed to maize, crop loan, government expenditure, and the relative price of maize to millet, were the significant explanatory variables. For output of maize and hectarage planted to maize, the dummy variable (0, for pre-liberalization and 1 for liberalized period) were significant. This means that market liberalization did affect these variables. However for fertilizer consumption and fertilizer price, the dummy variables were non-significant and this implied that market liberalization had no impact on fertilizer consumption and fertilizer price. Conclusion is that market liberalization if properly implemented had a positive impact on maize production in the country.[...] Read More.

Keywords: Market liberalization, maize production, Nigeria.

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