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Understanding the drivers and income effects of land rental markets is important to facilitate agricultural transformation. This study uses a panel dataset of rural households in Vietnam to examine the efficiency, equity and income effects of land rental markets. Probit and tobit models find that land is transferred from less to more efficient farmers and thus removing administrative barriers to the market operation is suggested. However, instrumental variable and quantile regressions show that the poor do not benefit significantly from participation in the markets. This highlights the need to take care of the poor to ensure that they are not left behind. Further analysis might focus on the efficiency thresholds that farmers switch from a market regime to another.
To read the full-text of this research, you can request a copy directly from the authors.
... Agricultural transformation is inevitable during economic growth in developing economies. This process can be considered as adjustments of economic entities in the agricultural sector in response to various driving forces (Odening & Grethe, 2012;Nguyen et al., 2021), both within and outside the sector. Within the sector, increases in farming ability facilitate the transfer of farmland from less to more efficient land users, and consequently enhance farm income (Gollin et al., 2002;Üngör, 2013). ...
... Thailand and Vietnam are also net agricultural export countries and major rice producers (Pingali, 1997;Nguyen et al., 2017). Rice exports have helped many small-holder farmers out of poverty traps in Thailand (Flaherty et al., 1999) and Vietnam (Nguyen et al., 2021). The other major crops grown include rubber and sugarcane in Thailand, and sugarcane, cassava, maize, and sweet potatoes in Vietnam. ...
Most studies of agricultural transformation document the impact of agricultural income growth on macroeconomic indicators of development. Much less is known about the micro‐scale changes within the farming sector that signal a transformation precipitated by agricultural income growth. This study provides a comparative analysis of the patterns of micro‐level changes that occur among small‐holder farmers in Uganda and Malawi in Sub‐Saharan Africa (SSA), and Thailand and Vietnam in Southeast Asia (SEA). Our analysis provides several important insights on agricultural transformation in these two regions. First, agricultural income in all examined countries is vulnerable to changes in precipitation and temperature, an effect that is nonlinear and asymmetric. SSA countries are more vulnerable to these weather changes. Second, exogenous increases in agricultural income in previous years improve non‐farm income and trigger a change in labor allocation within the rural sector in SEA. However, this is the opposite in SSA where the increase in agricultural income reduces non‐farm income, indicating a substitution effect between farm and non‐farm sectors. These findings reveal clear agricultural transformation driven by agricultural income in SEA but no similar evidence in SSA.
... Agricultural transformation is inevitable during economic growth in developing economies. This process can be considered as adjustments of economic entities in the agricultural sector in response to various driving forces (Odening and Grethe, 2012;Nguyen et al., 2021), both within and outside the sector. Within the sector, increases in farming ability facilitate the transfer of farmland from less to more efficient land users, and consequently enhance farm income (Gollin et al., 2002;Üngör, 2013). ...
... Thailand and Vietnam are also net agricultural export countries and major rice producers (Pingali, 1997;Nguyen et al., 2017). Rice exports have helped many small-holder farmers out of poverty traps in Thailand (Flaherty et al., 1999) and Vietnam (Nguyen et al., 2021). The other major crops grown include rubber and sugarcane in Thailand, and sugarcane, cassava, maize, and sweet potatoes in Vietnam. ...
Most studies of agricultural transformation document the impact of agricultural income growth on macroeconomic indicators of development. Much less is known about the micro-scale changes within the farming sector that signal a transformation precipitated by agricultural income growth. This study provides a comparative analysis of the patterns of micro-level changes that occur among smallholder farmers in Uganda and Malawi in Sub-Saharan Africa (SSA), and Thailand and Vietnam in Southeast Asia (SEA). Our analysis provides several important insights on agricultural transformation in these two regions. First, agricultural income in all examined countries is vulnerable to changes in precipitation and temperature, an effect that is nonlinear and asymmetric. SSA countries are more vulnerable to these weather changes. Second, exogenous increases in agricultural income in previous years improve non-farm income and trigger a change in labor allocation within the rural sector in SEA. However, this is opposite in SSA where the increase in agricultural income reduces non-farm income, indicating a substitution effect between farm and non-farm sectors. These findings reveal clear agricultural transformation driven by agricultural income in SEA, but no similar evidence in SSA.
... It is one of the fastest growing economies in the world with clear evidence of economic structural transformation, also in the agricultural sector. 2 The annual gross domestic product (GDP) growth was about 7% during the 2004-2014 period (Do et al. 2019), and non-agricultural sectors currently contribute more than 80% to the national GDP . This has facilitated the operation of cropland markets and created the opportunities for land users to expand their farms aiming at a higher level of farm productive efficiency and agricultural productivity (Nguyen et al. 2020). However, the Vietnam's agricultural sector is still charactetised by a high number of small farms with rice being the most dominant crop. ...
... The average technical efficiency is 0.77, implying that about 23% of the total cost of production can be minimized by improvement in managerial efforts. Our estimated efficiency score is in line with that of Nguyen et al. (2020) but smaller than the one reported by Huy and Nguyen (2019). However, Huy and Nguyen (2019) use the data for the entire Vietnam while our sample is limited to poorer provinces of Ha Tinh and Thua Thien Hue. ...
The Vietnamese agricultural sector has experienced a dramatic structural change based on increased specialization in rice cultivation. However, small scale rice-farmers have continued to grow multiple crops, especially in less developed provinces. While the literature advocates crop diversification for reasons of both economic and ecological sustainability, there lacks empirical evidence as to whether crop diversification brings efficiency and productivity gains to small farms. The present study is the first applications of the input-oriented stochastic distance function approach in estimating scale and scope economies using data of multi-crop farming households in Vietnam. We find strong evidence of product-specific economies of scale. Scope economies are also present for rice, vegetable, and other annual crop production. This suggests that crop diversification enhances efficiency and productivity. However, there still exists significant technical inefficiency in crop production, indicating opportunities to expand farm output at the existing level of inputs and technologies. More specifically, our empirical results indicate that it is desirable to expand vegetable and other annual crop production in mountainous areas while rice cultivation can be further expanded in delta and coastal regions.
... Several factors make Vietnam an interesting country to examine the extent to which local financial development matters for the growth of small firms. First, Vietnam has experienced rapid economic growth during the last several years (Nguyen 2009;Nguyen et al. 2021), and its financial sector has been under gradual reforms (Pham, Nguyen, and Johnston 2022;Ho, Nguyen, and Nguyen 2021;Tran, Nguyen, and Tran 2019). Second, small firms with less than 20 employees account for about 90% of all firms in Vietnam and are very important in generating income and employment (World Bank 2014). ...
This paper examines whether heterogeneities in financial development among Vietnamese provinces matter for firm growth in Vietnam. Using a nationally representative firm survey that covers more than 41,000 firms for the period 2009 − 2013, we estimate the impact of provincial financial development on the growth rates of firms by accounting for sectoral differences in growth opportunities. We find that province-level financial development promotes the growth rates of sales, investment and sales per worker of small firms, and reduces the growth rate of the wage-to-sales ratio. Our results imply that firms grow faster in provinces with a higher level of financial development. Moreover, the effect of financial development on growth rates is larger when firms operate in sectors with better growth opportunities.
... Appropriate and well-informed government support can significantly improve national innovation systems (Rong et al., 2021). Farmers with low incomes do not benefit significantly from participation in the market, this indicates the need to prioritize farmers' incomes to ensure that they are not left behind (Nguyen et al., 2021). When the elasticity of price transmission decreases, the variability of domestic prices decreases, and the variability of world prices increases (Wang & Wei, 2019). ...
Maize demand for feed, industry, and consumption is increasing in line with the increase in population and industry, while the supply of maize does not meet the demand. Therefore, it is necessary to identify the significant variables that affect maize cultivation and scenarios to increase maize production and farmers’ income using simulation model. As a method to develop the models, a system dynamics simulation model is used to accommodate internal and external variables that affect the production and farmers’ income which can be done using organic fertilizer, the integration between land expansion and organic fertilizer, and the implementation of precision agriculture. The simulation results show that land area, use of fertilizers, and technology adoption affect the production and income of maize farmers. The scenarios developed include organic fertilizer scenario, expansion and organic fertilizer scenario, and precision agriculture scenario. The resulting scenario can be used as a recommendation for the government and stakeholders in developing strategies and policies related to a sustainable maize farming system that can help increase the production and income of maize farmers.
... Vietnam has been considered one of the most rapid growth economies in the world during the last several decades (Nguyen et al. 2021), partly due to its increasing external trade (World Bank 2018). The inflation is well controlled from a high level of 7.85% during 2000-2013 to a moderate level of 3.1% during the last five years (2014)(2015)(2016)(2017)(2018). ...
In this paper, we examined the asymmetric and symmetric effects of real exchange rate on bilateral trade balance between the United States and Vietnam at the industry level by employing both ARDL and NARDL models. We found that (i) only symmetric real exchange rate is statistically significant in explaining the total trade balance between the US and Vietnam in the long-run at the 10% statistical significant level; (ii) the effect at the industry level is mixed and dependent on product category; and (iii) the asymmetric effects are found in both short-run and long-run in 29 industries which account for 69% of the total industry. These findings suggest that Vietnam could import more commodities with a high import weight such as agricultural products, cork and wood, textile fiber, chemicals, and machinery products to reduce the US’s trade deficit.
... The household questionnaire contains sections on the demographic, economic and social situation of households. This includes income-generating activities such as farming, livestock production, selfemployment, wage employment, remittances, and financial transfers (Nguyen et al. 2021). A separate section is designated for livestock production. ...
We examine the factors affecting livestock production by using a two-part fixed effects model and assess the contribution of livestock production in reducing income inequality by using the Gini decomposition method. We use panel household data from four rural surveys in three provinces of Vietnam. Our results show that (1) livestock production can bring either positive or negative income; (2) positive livestock income contributes about 11% to annual household income, but this figure is only 7% if negative livestock income is included; (3) positive livestock income reduces rural income inequality by about 3.3%, but this figure becomes 1.2% if negative livestock income is included. We suggest that enhancing access to credits, promoting rural education and road conditions, and empowering rural households to better cope with demographic shocks reduce negative livestock income and consequently improve income equality. In addition, priorities should be given to the development of large livestock.
We identify the factors affecting the participation in land accumulation of rural households by using a mul-tinomial logit model and assess the income effects of participation in land accumulation by using the propensity score matching (PSM) method. We use household data from a rural survey in three provinces in the Red River Delta of Vi-etnam in 2019. Our results show that farmland accumulation is significantly correlated with age and gender of household head, as well as agricultural productive assets, non-farm income, saving and access to credit. The participation in farmland accumulation leads to an increase in total household income, although the effect is different between land increasing and land decreasing groups. We suggest enhancing access to credit and supporting non-farm activities to accelerate the accumulation of agricultural land and consequently improve household income.
Understanding households’ resilience-building strategies is vital for the domains of humanitarian assistance, economic development, and poverty reduction, especially in the places where are vulnerable to shocks. In this study, we offer the first trial that takes into account the correlation between households’ risk attitude and their resilience-building strategies, namely savings as an absorptive capacity and income diversification as an adaptive capacity. We examine the effects of these resilience strategies on reducing the impacts of shocks and poverty. We use a panel data of 1227 identical households for Vietnam in two waves of the Thailand–Vietnam Socio-Economic Panel project to investigate the above issues. We address the endogenous problems of households’ risk attitude, savings, and income diversification. Our results show that more risk-averse households tend to save more and diversify their income portfolios. These precautionary strategies to build up their resilience capacity help prevent them from reducing consumption caused by shocks and from falling into poverty in absolute, relative, and multidimensional measures. We suggest that rural development policies in developing countries should focus on facilitating more income generation and employment opportunities. Furthermore, the development of rural education and infrastructure for information and communication technology should be taken into account of designing poverty reduction programs.
Supporting agricultural cooperatives might contribute to the livelihood improvement of many small-scale farmers in developing countries. This research examines the factors affecting the internet use of agricultural cooperatives with a focus on female leadership, its effects on cooperatives' economic, social, and innovative performance , and the distributional effects of internet use on economic performance. Our analysis relied on the data of 3,512 agricultural cooperatives collected in 2021 from Vietnam. We addressed the endogeneity issue of internet use in impact assessment by employing an instrumental variable approach. Our results show that female leadership was positively and significantly associated with internet use and that internet use had a positive and significant effect on returns on assets, returns on equity, labor productivity, payment per laborer, contribution to labor union and insurance per laborer, and innovation in products of agricultural cooperatives. In addition, unconditional quantile regressions show that internet use in agricultural cooperatives exacerbated income inequality. Enhancing female leadership and promoting rural education were recommended to improve agricultural cooperatives’ performance.
While the role of agricultural land size in rural Vietnam is well established for rural livelihoods, no evidence for the importance of land quality has been provided thus far in the literature. In the current study of the North Central region of Vietnam, we examine how land quality affects crop income, total income, and poverty using secondary data from a sample of 2468 households. In particular, we used an instrumental variable method to address the potential endogeneity of land quality. We provide the first evidence that land quality increases local household income and the likelihood of escaping poverty. The finding is robust even after accounting for the endogeneity of land quality and controlling for various important household characteristics. Notably, we show the mechanism by which land quality positively affects income and poverty reduction through its positive effect on crop income. Also, our study reveals that land fragmentation is negatively linked with land quality. This could be explained by the fact that fragmented land receives less investment (e.g., fertilizers or irrigation), resulting in lower land quality. The study offers a useful implication that reducing fragmentation may help local households invest more in land, thereby increasing crop income, which in turn improves their economic well-being.
Poverty remains a substantial threat in rural areas of many developing countries, and solving this problem requires an in-depth understanding of the income generating capacity that determines poverty. This paper examines the impact of agricultural commercialisation on the capability of rural households to accumulate and productively use assets and reduce structural and multidimensional poverty. A longitudinal dataset of around 2000 households with a total of 9781 observations from five rural surveys undertaken in the period 2008-2017 in Vietnam is used. Results from a fixed effects regression with an instrumental variable and a control function approach show that agricultural commercialisation has a positive effect on the accumulation of assets and reduces multidimensional and structural poverty over time. However, the effect is not homogeneous and is larger for households that are not mainly engaged in rice commercialisation. This suggests that commercialisation can be a path out of poverty, especially if policy makers move towards utilising other crops instead of rice.
Farmers have started to adopt Information and Communication Technology (ICT), which has considerable potential to impact farm performance. This study uses data from a 2018 survey of 763 vegetable smallholder farms in China to estimate the impact of ICT on technical efficiency (TE). We adopt propensity score matching to create a balanced sample of ICT users and non-users, and a stochastic frontier model with sample selection correction to compare the two groups’ TE. After accounting for self-selection bias from both observables and unobservables, the study finds a positive effect of ICT use on TE. On average, the TE score of ICT users is 0.64, whereas ICT non-users have a lower score of 0.57. A quantile regression analysis further reveals a heterogeneous impact of ICT on TE, with the largest effects among less efficient farms. These results suggest that vegetable farmers’ performance could be fostered by the widespread use of ICT. JEL codes: D24, Q12, Q16
Based on the 2013–2017 Chinese Family Database and China Household Finance Survey, this study examines the effect of farmland transfer on the income structure of agricultural households. We observe a significant rise in the income of transferred-out households, while that of transferred-in households is unchanged. A further empirical decomposition of income shows a significant increase in both the wage- and asset-generated incomes of transferred-out households. Although the income generated by transferred-in households through agricultural production and management increases significantly, the decrease in wage income is larger. The study’s empirical designs are robustly tested with propensity score matching and instrumental variables. Moreover, we conduct a comparative analysis of the external constraints faced by the two groups to explore the reasons for the divergence of the income effect. The results show that transferred-in households face highly pronounced external constraints in terms of capital, technology, and farmland size, while transferred-out households face relatively fewer impediments to non-agricultural employment. Our empirical results imply that external constraints can limit the social welfare improvements of agricultural land reform, suggesting that other complementary measures would be required for future policy improvements to function better.
The use of the internet is growing rapidly and has become an engine for economic development. However, few studies have examined the impact of internet use on agricultural production, and the results are not yet conclusive. Employing a dataset of more than 2000 observations in rural Vietnam, our study analyses the impact of internet use on agricultural productivity using the heteroscedasticity-based instrument approach suggested by Lewbel, Journal of Business and Economic Statistics, 2012, 30, 67-80 and examines the heterogeneity and distribution of the impact using quantile regressions. Our results show that internet use has significant and positive effects on agricultural productivity. However, these effects are heterogeneous across population groups. The positive effects of internet use are stronger for households with a lower level of education, with a young and female head, and from ethnic minorities. The benefits are also found to be skewed towards the group of farmers at the bottom of the productivity distribution. Therefore, we propose facilitating the diffusion of the internet, since it not only boosts agricultural productivity, but also reduces productivity inequality. In addition, we recommend promoting rural education, supporting local markets, investing more in irrigation systems, and facilitating farm mechanisation as these factors are found to contribute to increasing agricultural productivity.
Enhancing rice production efficiency in developing countries is important to improve the livelihoods of farmers and to ensure global food security for a growing population. Despite significant progress in recent decades, rice production is facing multiple challenges from climate change to the increasing competition for land, labor and capital from urbanization and industrialization. Given the fact that Vietnamese farmers often suffer from shocks and financial capital constraints, our paper aims to (i) investigate the impact of credit and shocks on rice production efficiency, and to (ii) examine the role of credit in mitigating the impact of shocks. Our findings show that weather shocks and land fragmentation are major sources of the inefficiency. Meanwhile, livestock,
farm mechanization, and education are factors promoting rice production efficiency. Our results also show that access to credit plays a significant role in mitigating the negative impact of weather shocks. Our paper calls for more assistance and support to farmers in mitigating the severe effects of weather shocks, in particular via the promotion of rural credit markets. In addition, the encouragement of farm mechanization, land defragmentation, livestock farming, and the improvement of rural education should be given high priority to improve rice production efficiency.
Land consolidation is important to increase the economies of scale in farming, and understanding its determinants and effects is useful for policy-makers to support rural transformation. In this paper, we examine the factors determining the voluntary participation of farm households in land consolidation and investigate its impacts on crop production costs, rural poverty, and rural transformation. Our results show that land consolidation is driven by farming efficiency. It significantly decreases land preparation and harvest costs, increases farm income, and reduces poverty. We conclude that land consolidation should be promoted to facilitate the redistribution of farm land from farmers who want to leave agriculture to those who continue to work in agriculture. The redistribution of farmland promotes agricultural transformation by reallocating labor from farm to non-farm sectors.
This research aimed to examine the factors affecting the participation of female rural-urban migrants in online marketplaces, and the welfare gains and their distribution. Our analysis was based on a unique dataset of rural households, villages, and rural-urban migrants in Thailand and Vietnam. Online market participation is classified into three activities: financial transactions, trading, and business. We accounted for the endogeneity issue of online market participation in the assessment of welfare impact by using an instrumental variable approach. Our results show that participation has a positive effect on the consumption of female migrants only when they participate in the complete bundle of online market activities. In addition, we find that the poor benefit insignificantly from online marketplaces. This raises a concern about increasing welfare inequality and suggests the poor should be supported so they are not left behind.
Natural resources are important in sustaining the livelihoods of rural households and the environment. However, over-exploitation is causing an alarming depletion of natural resources in many developing countries. At the same time, rapid economic growth has created non-farm employment opportunities for local people. In this context, examining the interrelationship between non-farm employment and natural resource extraction provides useful information for reducing resource extraction and improving rural households’ welfare. In this study, we use a dataset of 1780 identical households from three survey waves undertaken in 2010, 2013, and 2016 in Vietnam to (i) identify the determinants of rural households’ participation in non-farm activities, (ii) examine the interrelationship between non-farm employment and natural resource extraction, and (iii) investigate the impact of non-farm employment on rural households’ welfare. The findings from pooled sample estimations reveal that (i) cable internet at home and rural road quality positively affect households’ decisions to participate in non-farm employment; (ii) non-farm income and income from natural resource extraction have a negative association; and (iii) non-farm income significantly contributes to poverty reduction in both relative and absolute terms. Our findings suggest that improved provision of non-farm opportunities and increased investment in infrastructure and telecommunication are needed to improve rural households’ welfare and consequently reduce their natural resource exploitation.
Small and fragmented farmland parcels are widely believed to be major impediments to agricultural activities. In this study, instrumental variables models are constructed to estimate the influence of the farm size and the number of farmland plots on household welfare proxied by income and the asset index in Vietnam. The study exploits the panel data of households collected from the Vietnam Access to Resources Household Survey (VARHS) every second year in the period 2008–2014, capturing cultural, political and socioeconomic dimensions of rural Vietnam. A positive relationship was found between farm size and household economic welfare proxied by household per capita income and a household asset index; however, this relationship was negative for the number of land plots. The main conclusion from our analysis is that household welfare would be aided by land policies towards increasing the size of farmland and decreasing land fragmentation. However, our findings also indicate that to be effective, these land policies should be complemented by rural education, effective community development and encouragement of non‐farm employment activities.
This paper investigates the role of land rental markets in livelihood choices using data from 792 farming households in rural Vietnam. First, we cluster households according to livelihood strategies and estimate the determinants of the respective decision. In a second step, we analyze the contribution of rented land in linking smallholders to output markets. Our results suggest that rented land can provide smallholders with an opportunity to increase their agricultural activities and avoid resorting to less remunerative activities such as agricultural wage labor. Moreover , rented crop area increases the probability of market participation as well as the quantity of sales. Our results point to the need for a further liberalization of land rental markets specifically targeted at households that have been excluded from more remunerative livelihood strategies previously. Supporting these households to have access to the assets required to cultivate the additional area is thus recommended.
Rice is one of the most important crops for food security and rural livelihoods in many developing countries in Asia. However, the current rice farming practices heavily rely on synthetic fertilizers and pesticides that pose a significant threat to the environment. Further, the overuse of inputs might lead to the wastage of resources. Therefore, this research examines the impact of shocks experienced by farmers on their risk attitude, input use, and technical efficiency in rice farming. We use a balanced panel dataset of 1220 rice households from Thailand collected in 2013 and 2017 and employ a fixed-effects estimation with instrumental variables to account for endogeneity concerns. Our results show that fertilizers and pesticides are risk-decreasing inputs, which means rice farmers, who are more unwilling to take risks, tend to apply more fertilizers and pesticides. Adverse shocks affect rural households’ risk attitudes, leading to over applications of fertilizers and pesticides and, therefore, reducing farming efficiency. We suggest that policies providing crop insurance and enhancing farmers’ awareness on proper input application are critical to mitigate the adverse impacts of shocks and reduce the inefficient use of these chemical inputs.
This study examines the role of private sector development (PSD) in multidimensional poverty alleviation in Vietnam, using provincial panel data for the 2010-2019 period. Private sector development is measured as the proportion of the workforce in (i) all private firms, (ii) domestic private firms and (iii) multinational firms, respectively. We use a two-step general method of moment (GMM) estimator to account for unobservable heterogeneity, simultaneity, and the relationship between current provincial characteristics and past provincial poverty. We find that each percentage point increase in private sector employment contributes to a reduction of 0.30% and 0.31% in multidimensional poverty and monetary poverty, respectively. Notably, further analysis confirms that a similar effect is also found for both domestic private and multinational enterprises. In addition, our study finds that economic growth and educational attainment emerge as major factors mitigating multidimensional and unidimensional poverty, while income inequality increases both poverty measures.
Eliminating ultra-poverty has received particular attention of policymakers and scholars. The ultra-poor in mountainous regions often live on subsistence farming and natural resource extraction. One of the sustainable ways to support them is to find alternative livelihood options that reduce natural resource extraction and increase household income. During the last decades, Vietnam has reduced its poverty significantly. However, the ultra-poor still exist especially among ethnic minority groups in the northern mountains, increasing pressures on already degraded forest resources. This paper assessed the contribution of indigenous pig production to the welfare of ultra-poor ethnic minority households using the propensity score matching method and identified the factors affecting indigenous pig production using generalized Poisson, negative binomial and binary logistic regression models. The analysis was based on the data of 495 rural households surveyed in 2019. Results showed that (1) indigenous pig production had significant and positive effects on household income of and multidimensional poverty reduction among ultra-poor ethnic minority households and (2) the factors positively affecting indigenous pig production are access to credits, number of motorbikes, government support under the poverty reduction programs, road type at the villages, and irrigation systems, while the effects of distance from home to the nearest agricultural input shops and access to the national electricity are negative. We suggest the government to continue improving irrigation systems, road conditions and access to national electricity grids in this mountainous region.
The main aim of the current study is to investigate the influence of landlessness and landholding on the choice of livelihoods among rural households in the Red River Delta. Among five livelihoods adopted by local households, we find that the highest income derives from formal wage earning, the lowest from agricultural and informal wage-paying livelihoods. The middle income group comprises livelihoods based on formal wage-paying jobs and other sources, and nonfarm self-employment and other income. Notably, the study provides evidence that landlessness or land shortage is not a potential barrier preventing rural households from pursuing gainful livelihoods in the Red River Delta. Specifically, households affected by landlessness or a shortage of land tend to adopt non-farm livelihoods that are more profitable than agricultural livelihoods. The finding suggests that landlessness or shortage of land should not be viewed as an absolutely negative phenomenon in the region.
JEL codes: K25; Q15; Q12: Q57
This article describes sfcross and sfpanel, two new Stata commands for the estimation of cross-sectional and panel-data stochastic frontier models. sfcross extends the capabilities of the frontier command by including additional models (Greene, 2003, Journal of Productivity Analysis 19: 179–190; Wang, 2002, Journal of Productivity Analysis 18: 241–253) and command functionalities, such as the possibility of managing complex survey data characteristics. Similarly, sfpanel allows one to fit a much wider range of time-varying inefficiency models compared with the xtfrontier command, including the model of Cornwell, Schmidt, and Sickles (1990, Journal of Econometrics 46: 185–200); the model of Lee and Schmidt (1993, in The Measurement of Productive Efficiency: Techniques and Applications), a production frontier model with flexible temporal variation in technical efficiency; the flexible model of Kumbhakar (1990, Journal of Econometrics 46: 201–211); the inefficiency effects model of Battese and Coelli (1995 Empirical Economics 20: 325–332); and the “true” fixed- and random-effects models of Greene (2005a, Journal of Econometrics 126: 269–303). A brief overview of the stochastic frontier literature, a description of the two commands and their options, and examples using simulated and real data are provided.
SFAMB is a flexible econometric tool designed for the estimation of stochastic frontier models. Ox is a matrix language used in different modules, with a console version freely available to academic users. This article provides a brief introduction to the field of stochastic frontier analysis, with examples of code (input and output) as well as a technical documentation of member functions. SFAMB provides frontier models for both crosssectional data and panel data (focusing on fixed effects models). Member functions can be extended depending on the needs of the user.
Farm production and natural forest extraction remain principal livelihood strategies of local people in many rural areas of the developing world. In this paper, we apply stochastic frontier analysis to evaluate farm production efficiency and simultaneous equations modelling to estimate the interrelationship between farm production efficiency and natural forest extraction. We use a two-year panel dataset of 430 rural households in Stung Treng province of Cambodia. We find that natural forest extraction is decreasing in farm production efficiency. Our results suggest that improving farm production efficiency, via the promotion of rural education and privatization of farm land, should be considered an integral component of natural forest conservation policy.
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We use nationally representative household-level panel survey data in two neighboring countries in Southern Africa—Zambia and Malawi—to characterize the current status of rural land rental market participation by smallholder farmers, and their subsequent welfare impacts. Rural rental market participation is much higher in densely-populated Malawi than in lower-density Zambia, reflecting the role of land scarcity in driving rental market development. Consistent with previous literature, we find evidence that rental markets contribute to efficiency gains within the smallholder sector by facilitating the transfer of land from less-able to more-able producers, on average, in both countries. Furthermore, we find that rental markets serve to re-allocate land from relatively land-rich to land-poor households. We examine the impacts of participation on a number of welfare outcomes and find evidence for generally positive returns to renting in land in both countries, on average. However, our analysis also indicates that the returns to renting in land vary strongly with scale of production: tenants who produce more have larger returns to renting in, and many of the smaller producers who rent in do so at an economic loss. The impacts of renting out (i.e., participating in markets as landlords) are decidedly more mixed, with overall negative returns to landlords in Malawi and negligible returns to landlords in Zambia. The findings in this article highlight the need for researchers and policymakers in sub-Saharan Africa to stay attuned to how land rental market participation and its impacts evolve in the near future.
This paper aims to examine the dynamics of land transactions, machine investments, and the demand for machine services using farm panel data from China. Recently, China’s agriculture has experienced a large expansion of machine rentals and machine services provided by specialized agents, which has contributed to mechanization of agricultural production. On the other hand, the empirical results show that an increase in non-agricultural wage rates leads to expansion of self-cultivated land size. A rise in the proportion of non-agricultural income or the migration rate also increases the size of self-cultivated land. Interestingly, however, relatively educated farm households decrease the size of self-cultivated land, which suggests that relatively less educated farmers tend to specialize in farming. The demand for machine services has also increased if agricultural wage and migration rate increased over time, especially among relatively large farms. The results on crop income also support complementarities between rented-in land and machine services (demanded), which implies that scale economies are arising in Chinese agriculture with mechanization and active land rental markets.
Facing widespread poverty and land degradation, Vietnam started a land reform in 1993 as part of its renovation policy package known as "Doi Moi". This paper examines the impacts of improved land tenure security, via this land reform, on manure use by farm households. As manure potentially improves soil fertility by adding organic matter and nutrients to the soil surface, it might contribute to improving soil productive capacity and reversing land degradation. Random effect regression models are applied to a panel dataset of 133 farm households in the Northern Uplands of Vietnam collected in 1993, 1998, and 2006. The results confirm that land tenure security has positive effects on manure use, but the levels of influence differ depending on whether the land has been privatized or whether the land title has already been issued. In addition, manure use is also influenced by the number of cattle and pigs, the education level and ethnicity of household heads, farm land size and non-farm income. The findings suggest that speeding up land privatization and titling, encouraging cattle and pig rearing, and improving education would promote manure use in farm production. However, careful interpretation of our research findings is required as land privatization, together with economic growth and population pressure, might lead to overuse of farm inputs.
This article considers estimation of a stochastic frontier production function-the type introduced by Aigner, Lovell, and Schmidt (1977) and Meeusen and van den Broeck (1977). Such a production frontier model consists of a production function of the usual regression type but with an error term equal to the sum of two parts. The first part is typically assumed to be normally distributed and represents the usual statistical noise, such as luck, weather, machine breakdown, and other events beyond the control of the firm. The second part is nonpositive and represents technical inefficiencythat is, failure to produce maximal output, given the set of inputs used. Realized output is bounded from above by a frontier that includes the deterministic part of the regression, plus the part of the error representing noise; so the frontier is stochastic. There also exist socalled deterministic frontier models, whose error term contains only the nonpositive component, but we will not consider them here (e.g., see Greene 1980). Frontier models arise naturally in the problem of efficiency measurement, since one needs a bound on output to measure efficiency. A good survey of such production functions and their relationship to the measurement of productive efficiency was given by F0rsund, Lovell, and Schmidt (1980).
This paper studies the effect of local off-farm employment and migration on the technical efficiency of rural households’ crop production using a five-year panel dataset from more than 2000 households in five Chinese provinces. While there is not much debate about the positive contribution of migration and local off-farm employment to China’s economy, there is increasing concern about the potential negative effects of moving labor away from agriculture on China’s future food security. This is a critical issue as maintaining self-sufficiency in grain production will be critical for China to feed its huge population in the future. Several papers have studied the impact of migration on production and have yielded ambiguous results. But the impact of migration on technical efficiency is rarely studied. Methodologically, we incorporate the correlated random-effects approach into the inefficiency analysis of the standard stochastic production frontier model to control for unobservable factors that are correlated with migration and off-farm employment decisions and technical efficiency. The most consistent result that emerged from our econometric analysis is that neither migration nor local off-farm employment has a negative effect on the technical efficiency of grain production, which does not support the widespread notion that vast-scale labor migration could negatively affect China’s future food security.
This article reviews the past and potential future roles of land tenure reforms and land markets in Sub-Saharan Africa (SSA) as responses to population growth in the process of land use intensification and livelihood transformation. The farm size distribution and the existence of an inverse relationship (IR) between farm size and land productivity in SSA and the implications of this relationship for efficiency and equity are investigated. More secure property rights and removal of restrictions on land markets have the potential to create both efficiency and equity benefits, but there are high risks of elite capture of large land areas with inefficient and inequitable outcomes. This situation is the case not only in land-abundant areas but also in urban and peri-urban areas where increasingly larger proportions of people will make their living. Increasing population pressure in densely populated rural areas contributes to more rapid rural–urban migration, and creating alternative livelihood opportunities for the migrating youth population is essential to achieving economic development with social stability.
This paper describes sfcross and sfpanel, two new Stata commands for the estimation of cross-sectional and panel data stochastic frontier models. sfcross extends the official frontier capabilities by including additional models (Greene 2003; Wang 2002) and command functionality, such as the possibility to manage complex survey data characteristics. Similarly, sfpanel allows to estimate a much wider range of time-varying inefficiency models compared to the official xtfrontier command including, among the others, the Cornwell et al. (1990) and Lee and Schmidt (1993) models, the flexible model of Kumbhakar (1990), the inefficiency effects model of Battese and Coelli (1995) and the 'true' fixed and random-effects models developed by Greene (2005a). A brief overview of the stochastic frontier literature and a description of the two commands and their options are given, and illustrations using simulated and real data are provided.
If you find it useful, please cite as
Belotti F., Daidone S., Ilardi G., Atella V., 2013. "Stochastic frontier analysis using Stata" Stata Journal, 13(4), 718-758.
Estimation of technical efficiency is widely used in empirical research using both cross-sectional and panel data. Although several stochastic frontier models for panel data are available, only a few of them are normally applied in empirical research. In this article we chose a broad selection of such models based on different assumptions and specifications of heterogeneity, heter-oskedasticity and technical inefficiency. We applied these models to a single dataset from Norwegian grain farmers for the period 2004–2008. We also introduced a new model that disentangles firm effects from persistent (time-invari-ant) and residual (time-varying) technical inefficiency. We found that efficiency results are quite sensitive to how inefficiency is modeled and interpreted. Consequently, we recommend that future empirical research should pay more attention to modeling and interpreting inefficiency as well as to the assumptions underlying each model when using panel data.
This paper examines the link between formal land tenure and poverty alleviation in the context of rural Vietnam. It assesses the relevance of the ideas of Hernando de Soto through the documentation of both formal and informal land market processes in order to identify efficiencies.The findings suggest that Vietnam has made significant progress in extending formal land use rights to agricultural land. However, obstacles remain in the issue of title on rural residential land, including high land use levies, costs of converting garden to residential land, surveying costs and the skills of cadastral officials.Transactions in agricultural land increasingly take place within the formal sector. In general, land sales and mortgages are processed quickly and at low cost by land administration authorities. However, evidence was found of informal fees, requirements for extra documentation, inconsistent land valuation procedures and government intervention to prevent sale of small plots.Where informality survives in the land market, examples were found of its detrimental effects, particularly on poor households: ownership disputes, reduced land values and difficulties in mortgaging informally held land. However, the Vietnamese evidence hints that the 'transforming effects' of formal title can also be exaggerated. Formal land title can cause its own difficulties when plot measurement is poorly executed and boundary disputes arise. The decisive role of formal title in facilitating mortgages is also questionable when banks accept other types of land document and the mechanisms for foreclosure remain complicated.Overall the research suggests that poor people may benefit more from efficient, inclusive and low cost formal land administration systems than from attempts to protect them from market forces. A series of recommendations are put forward to improve Vietnam's land administration system as the new 2003 Land Law is implemented.
This paper examines the role of household endowments of imperfectly tradeable factors of production (e.g., male, female, child labor, and draft animals) on land leasing. An explicit attempt is made to account and test for the role of transaction costs on the incidence and extent of adjustment taking place through the land lease market. The econometric model is implemented using pooled data from six villages in the semiarid region of India. The results confirm the significant role of nontradeable family endowments and indicate the presence of frictions in the land tenancy market.
Tenancy markets provide an opportunity to trade land between labor-scarce farm households and labor-abundant households. In China and other rapidly growing countries in Asia where rural to urban migration is becoming active, facilitating well-functioning tenancy markets is important to increase farm size and farmer’s income. In China, however, individual land rights are weak and in many communities land may be reallocated by village leaders to other households if it is rented out. We hypothesize that the risk of expropriation of rented-out land is a major constraint on land rental transactions in China. We find empirical evidence in support of this hypothesis using farm household data.
Economic theory suggests that increased tenure security will lead to increased productivity. However, existing literature on the relationship between land tenure and land productivity provides inconclusive evidence. The present paper analyzes the impact of land reform on chemical fertilizer use and land productivity of rural farms in the Northern Uplands of Vietnam using a panel dataset collected before and after land reform. The results show that land reform has positive effects on both chemical fertilizer use and land productivity, but the level of influence is different between land privatization and land titling. Relevant policy implications are thus derived for the promotion of farm production in the region.
This paper proposes an econometric framework for joint estimation of technology and technology choice/adoption decision. The
procedure takes into account the endogeneity of technology choice, which is likely to depend on inefficiency. Similarly, output
from each technology depends on inefficiency. The effect of the dual role of inefficiency is estimated using a single-step
maximum likelihood method. The proposed model is applied to a sample of conventional and organic dairy farms in Finland. The
main findings are: the conventional technology is more productive, ceteris paribus; organic farms are, on average, less efficient
technically than conventional farms; both efficiency and subsidy are found to be driving forces behind adoption of organic
This paper investigates energy transition, energy poverty and energy inequality in Vietnam employing a longitudinal dataset of a nationally representative household survey. We use the data on residential energy expenditure of more than 9,000 households over the period 2004–2016. We find a transition from traditional energy to modern energy but this transition varies across regions, between ethnic and welfare groups and between rural and urban population. The poor and ethnic minority households still rely heavily on traditional energy sources such as coal and biomass to meet their energy demands. Electricity poverty has decreased but energy-cost poverty has increased. In addition, energy inequality tends to decrease at a more significant rate than income and consumption inequalities. We propose a national program for energy poverty alleviation be established to devise policies to lower households’ energy costs. Further assistance to the poor and ethnic minority households is also recommended so that they can afford a higher level of electricity consumption.
Whether local financial development could reduce the constraints for women to promote economic growth is an important question that has been paid little attention. In this paper, we use data of more than 40,000 firms collected in Vietnam from 2009 to 2013 to examine the effects of local financial development, male ownership and the joint effect
of these factors on firm growth. To address endogeneity issues which might arise by the causality from firm growth to local financial development, we employ the heteroscedasticity-based identification strategy. The results show that local financial development promotes firm performance in terms of the growth rates of sales, investment, sales per worker, return on investment (ROI), return on assets (ROA), and return on equity (ROE). The results also suggest the difference in entrepreneurs’ gender affects firm growth. Moreover, the joint effect of local financial development and
male ownership is significantly negative through all specifications. This implies that local financial development could help reduce the gender gap in promoting firm growth.
The increasingly open market in China has ushered significant changes in the Chinese agricultural sector. Most existing research indicates that land transfer improves technical efficiency. However, this study finds that from the perspective of land cost, land transfer will have a negative impact on technical efficiency in China. With the development of agricultural moderate-scale operation, land cost continues to rise. From 2009 to 2016, land transfer price in Jiangsu Province rose from 3412.5 CNY/hm² to 11,866.5 CNY/hm², accounting for 38.1% of the total production cost. These are high prices, even at the international level. A further empirical test shows that land cost has an inverted “U” shape effect on the technical efficiency of wheat production. In other words, when the land cost for two growing seasons exceeds 3514.35 CNY/hm² or the land cost for the wheat growing season is above 1665.45 CNY/hm², increasing the land cost will further reduce the competitiveness of the wheat industry. To develop Chinese agriculture, it is necessary to internalize and market land cost through land contract cooperation and land custody. It is also possible to consider establishing a land-transfer insurance system and promote the sustainable development of land transfer.
Increasing farm technical efficiency in developing countries is essential to raise farm productivity, and cropland rental market is theoretically expected to contribute to farm production efficiency growth. However, empirical evidence on the relationship between cropland rental market and farm technical efficiency in developing countries is scarce. In this paper, we apply the one-step stochastic frontier approach to evaluate farm technical efficiency and to determine the effect of cropland rental market on farm technical efficiency. We use a nationally representative sample dataset collected in 2004 and 2008 in Vietnam for our analysis. We find that cropland rental transactions promote farm technical efficiency and that the rental market transfers cropland from less to more efficient producers. We suggest that the constraints for cropland rental market operation be removed. In addition, promoting cropland registration for land use certificate, encouraging land defragmentation, and facilitating rural education should be undertaken to increase farm technical efficiency.
There is growing interest in understanding the links between land reforms, land markets, and poverty reduction in Africa. The study uses four‐wave panel data from the northern highlands of Ethiopia to assess the dynamics of rural poverty taking into account the status of participation of rural households in the land rental market. Applying both nonparametric (Kaplan–Meier estimator) and semi‐parametric survival models that control for duration dependence of poverty transition, results show participation and degree of participation on the supply side of the tenancy market (landlords) have highly significant and positive effect on the chances of escaping poverty while the same cannot be said about the demand side of the tenancy market (tenants). The empirical evidence also confirms that households headed by older and literate people have relatively larger exit rates from poverty as compared with households headed by younger and illiterate ones. Though transacting farmers may engage themselves in win–win rental arrangements by the time they join the tenancy market, results indicate that gains are unequal as those tenants who enter the markets from low economic leverage (were poor) are liable to face a lower margin of net gains, which may limit their ability to move out of poverty.
This paper addresses the endogeneity of inputs and output (which is mostly ignored in the stochastic frontier (SF) literature) in the SF panel data model under the behavioural assumption that firms maximize returns to the outlay. We consider a four component SF panel data model in which the four components are: firms’ latent heterogeneity, persistent inefficiency, transient inefficiency and random shocks. Second, we include determinants in transient inefficiency. Finally, to avoid the impact of distributional assumptions in estimating the technology parameters, we apply a multi-step estimation strategy to an unbalanced panel dataset from Norwegian crop-producing farms observed from 1993 to 2014. Distributional assumptions are made in second and third steps to predict both persistent and transient inefficiency, and their marginal effects.
This paper assesses the contribution of livestock to reducing rural poverty and examines the determinants of livestock assets with panel data from Vietnam. The findings show that livestock production contributes to reducing poverty and livestock assets are influenced by the number of shocks that households faced during the last three years, access to credits, farmland size, education of household head, irrigation system, and access to the national electricity. We suggest that empowering rural households to better cope with shocks contributes to developing livestock and consequently to reducing rural poverty.
Understanding farmers' land use decision-making is of interest to policy makers and scientific communities. Furthermore, comparing farmers' land use decision-making between countries offers a functioning instrument to enhance this understanding, since one country can benefit from the experiences of another. This study extends the sustainable livelihoods framework to examine and compare the factors affecting farmers' land use decision-making regarding land use choices and crop diversification. A panel dataset of 514 farm households in Ha Tinh (Vietnam) and 422 farm households in Ubon Ratchathani (Thailand) collected in 2007 and 2013 is used for the analyses. The results reveal that (i) farmers' land use decision-making is determined by various factors representing the livelihood platforms , weather shock experience and expectation, and physical-economic conditions of the living localities, and (ii) crop diversification is a weather shock-coping strategy of rural households. We suggest that (i) promoting farm land reconsolidation and privatization, (ii) enhancing access to credit sources and national electricity networks, and (iii) improving rural road conditions and attracting investments in rural non-agricultural sectors contribute to reducing farmers' vulnerability to climate variability.
This study assesses the de jure and de facto land market legal restrictions in the Tigray region in Ethiopia and the extent of implementation of the new land rental restrictions that were introduced in 2006 that state that not more than 50% of a farm can be rented out. The knowledge, perceptions and attitudes regarding the law among local Land Administration Committee (LAC) members, local conflict mediators and a sample of rural households are investigated. We find that the rented area restriction is commonly violated and not enforced. The law is circumvented by framing sharecropping as something other than land rental, although sharecropping is the dominant land rental contract in the region. When it is made clear that the law may hurt weak and vulnerable (often female-headed) households that are unable to farm their land themselves and therefore rent it out, the large majority of LAC members, conflict mediators and rural households are against the law.
China's economic reforms starting in the late 1970s have resulted in rapid economic growth, with annual growth in gross domestic product averaging greater than 10% per year for more than 30 years. Accompanying this rapid growth in national accounts have been rapid and widespread reductions in poverty. With these reductions in poverty, however, there has often been observed an increase in income inequality, both between as well as within rural and urban sectors. This rising income gap challenges the notion that economic reforms in China have been as successful as the poverty statistics would suggest. In this paper, we suggest that an alternative view would be to consider the effects of these reforms on changing the chronic nature of poverty and reducing household vulnerability to poverty. Using a balanced panel from rural China from 1991 through 2006, we find that most poverty among our sample has shifted from being chronic in nature to being transient, with households either shifting into a state of being non-poor moving in and out of poverty. Among our sample, vulnerability to poverty has been declining over time, but the declines are not uniform over time or space. We decompose household vulnerability status into two proximate causes: low expected income and high income variability, finding vulnerability increasingly due to income variability. Additionally, we demonstrate that vulnerable households have very different characteristics than non-vulnerable households.
Agriculture and agricultural policy in Finland and Norway have shared many common features in the past, except that Finland
joined the European Union in 1995. In this article, we examine profitability and productivity dynamics in Finnish and Norwegian
farms during the period 1991 to 2008. Our analysis draws on a decomposition of profitability change into various sources.
The results provide evidence that the stronger liberalisation of agricultural policy in Finland has provided greater flexibility
for farmers to change and thus has created better scope for productivity and profitability improvements compared with Norway.
This empirical study aims to shed light on the dynamic linkages between innovation, efficiency and productivity at the individual
farm level. We use a comprehensive dataset for dairy farms in Germany for the period 1996–2010. Based on a directional distance
frontier framework and the Luenberger index, we estimate the changes in efficiency, technical change and productivity over
the period considered and simultaneously investigate possible factors for technically efficient milk production at farm level.
We find that investments in innovative technology indeed increase the productivity of dairy production by shifting out the
production frontier. Our findings further imply that investments in innovative dairy technologies require a sufficient level
of complementary education to trigger also an increase in efficiency at farm level. The quality of human capital in terms
of educational training seems finally crucial for a lasting increase in efficiency as a result of innovation.
Agriculture and food cultivation production remains a key sector in the Vietnamese economy in terms of productive activities, income generation, and national export earnings. Higher world market prices should therefore in principle have a beneficial impact on rural farmers. This is based however on the assumption that world prices are transmitted and that farmers have the capacity to respond. In addition, many poorer farm households may be net consumers. Using data from the Vietnam Access to Resources Household Survey (VARHS) and the Vietnam Household Living Standard Survey (VHLSS) combined with available macro-data, this paper investigates how global price changes appear to have impacted on rural welfare in Vietnam during 2006-12. In this paper we study the case of rice in Vietnam, in the context of the 2008 food price spike. We analyse the responses of domestic producer and consumer prices, and discuss the policy actions taken by the government to help reduce the impact on consumers, as well as to continue to encourage production. We also look at the distributional impact of the resulting domestic price changes, using data from a specialist rural household survey to look at production response. Vietnam was effective in taking policy actions to limit the extent of transmission of the world price changes; and more poorer households benefitted from the price increase than lost.
This paper explores the secular decline in the employment share in agriculture as a result of productivity growth in the agricultural sector. I study an equation that states that employment share in agriculture is determined by the subsistence constraint and productivity in agriculture. Given the calibrated value for subsistence level of consumption in agriculture, labor productivity in this sector implies a share of employment in agriculture in the model that turns out to be very close to the data for a variety of countries between 1963 and 2005.
With the increased availability of longitudinal data, dynamic panel data models have become commonplace. Moreover, the properties of various estimators of such models are well known. However, we show that these estimators breakdown when the data are irregularly spaced along the time dimension. Unfortunately, this is an increasingly frequent occurrence as many longitudinal surveys are collected at non-uniform intervals and no solution is currently available when time-varying covariates are included in the model. In this paper, we propose several new estimators for dynamic panel data models when data are irregularly spaced and compare their finite sample performance to the naïve application of existing estimators. We illustrate the practical importance of this issue by turning to two applications on early childhood development.
There is a 34-fold difference in average farm size (land per farm) between rich and poor countries and striking differences in their size distributions. Since labor productivity is much higher in large relative to small farms, we study the determinants of farm-size differences across countries and their impact on agricultural and aggregate productivity. We develop a quantitative model of agriculture and non-agriculture that features a non-degenerate size distribution of farms. We find that measured aggregate factors such as capital, land, and economy-wide productivity cannot account for more than 1/4 of the observed differences in farm size and productivity. We argue that, among the possible explanations, farm-level policies that misallocate resources from large to small farms have the most potential to account for the remaining differences. Such farm-size distortions are prevalent in poor countries. We quantify the effects of two specific policies in developing countries: (a) a land reform that imposes a ceiling on farm size and (b) a progressive land tax. We find that each individual policy generates a reduction of 3 to 7% in average size and productivity.
This article proposes a new method of obtaining identification in mismeasured regressor models, triangular systems, and simultaneous equation systems. The method may be used in applications where other sources of identification, such as instrumental variables or repeated measurements, are not available. Associated estimators take the form of two-stage least squares or generalized method of moments. Identification comes from a heteroscedastic covariance restriction that is shown to be a feature of many models of endogeneity or mismeasurement. Identification is also obtained for semiparametric partly linear models, and associated estimators are provided. Set identification bounds are derived for cases where point-identifying assumptions fail to hold. An empirical application estimating Engel curves is provided.
This report aims to strengthen the effectiveness of land policy insupport of development and poverty reduction by setting out theresults of recent research in a way that is accessible to a wide audience ofpolicymakers, nongovernmental organizations, academics in WorldBank client countries, donor agency officials, and the broader developmentcommunity. Its main message rests on three principles
The purpose of this paper is to examine the impact of international remittances on different household welfare indicators including child education, assets, durable goods, and reservation wages of other working age household members. It examines how international remittances are spent for production and consumption by receiving households.
This paper uses fixed‐effect regressions to estimate the impact of international remittances on household spending in Vietnam using Vietnam Household Living Standard Surveys 2006 and 2008.
It is found that most of international remittances are spent on housing and land, debt repayment and saving. A small proportion of remittances are used to buy durable goods. Remittances are not spent in production as well as living consumptions. The effect of international remittances on consumption‐based poverty is very limited.
The findings from this paper suggest that current international remittances are not an effective measure for poverty reduction in the short‐run in Vietnam.
This paper presents a gender analysis of the World Bank's recent Policy Research Report. It assesses the implications for women, and more widely for gender relations, of the World Bank's approach to land relations. The analysis focuses on two issues: the Report's promotion of formal rural credit and its assumption of the availability of women's agricultural labour. This paper challenges the notion of 'non-contractible labour', as well as the Report's use of the household as a unit of analysis and its underlying assumption of motivated family labour. It discusses the consequences for households of defaulting on rural loans and challenges the Report's attempts to link the promotion of credit markets and reliance on women's unpaid labour to poverty reduction. In light of this discussion, the paper argues that it continues to be important for advocates of women's rights in Africa to be attentive to land issues and in particular to respond to the World Bank's land agenda.
In this paper we introduce a new specification of technical inefficiency in panel data models. First, the overall technical inefficiency is decomposed into a persistent component and a residual component. Second, a multistep procedure is used to estimate the parameters of the production function as well as persistent and residual technical inefficiency. The advantage of this multistep procedure is that the parameter estimates are robust to distributional assumptions on the error components. Distributional assumptions are required in the final stage to estimate the residual component of technical inefficiency. The model is used to examine technical efficiency in Swedish dairy farms during the period 1976 to 1988.
Agriculture made major contributions to China’s growth and poverty reduction, but the literature has rarely focused on the institutional factors that might underpin such structural transformation and productivity. Drawing on an 8-year panel of 1,200 households in six provinces, we find that land tenure insecurity, measured by past land reallocations, discourages households from quitting agriculture, and the recognition of land rights through formal certificates encourages the temporary migration of rural labor. A sustained increase in nonagricultural opportunities will reinforce the importance of secure land tenure, a precondition for successful structural transformation and continued economic attractiveness of rural areas.
Traditional development economics has recently been revolutionized by the application of new economic tools and concepts. Development Microeconomics is the first in a series of books which will look at the entire spectrum of development economics issues, combining the strengths of conventional developmental thought with the insights of contemporary mainstream economics. The main new conceptual tool used is the application of the theory of imperfect information and the effects this has on the the behaviour of economic agents. This helps to explain why perfect competition models rarely have success when dealing with developing economies. The authors also stress the necessity of balance in dealing with many of the classic problems in development studiesthe importance of both the individual as economic agent and cultural norms as the framework of social behaviour; the dual relationship between equity and efficiency in economic policy-making; the importance of market rivalry and the potential of market breakdown. Designed specifically for graduate students, this book analyses the key microeconomic problems facing the very poorest sectors of developing economies. It utilises simple theoretical models, and is presented in a compact and analytical form. High technical sophistication is avoided, and the only pre-requisite is some familiarity with the tools of general microecomic theory at a first-year graduate or advanced undergraduate level. Available in OSO: http://www.oxfordscholarship.com/oso/public/content/economicsfinance/0198773714/toc.html
Poverty and deforestation are critical issues in a number of developing countries where the policy framework is in many cases insufficient to provide rural people an incentive to afforest. This paper analyzes both the impact of land privatization on afforestation efforts of rural farm households in the Northern Uplands of Vietnam and the economic incentive of farm households on afforestation efforts. The determinants of afforestation by farm households were analyzed. Empirical findings were used to derive relevant policy implications for promoting forest rehabilitation in a country where the majority of forestland had been in State control prior to land privatization in 1994.
This paper examines several extensions of the stochastic frontier that account for unmeasured heterogeneity as well as firm inefficiency. The fixed effects model is extended to the stochastic frontier model using results that specifically employ its nonlinear specification. Based on Monte Carlo results, we find that the incidental parameters problem operates on the coefficient estimates in the fixed effects stochastic frontier model in ways that are somewhat at odds with other familiar results. We consider a special case of the random parameters model that produces a random effects model that preserves the central feature of the stochastic frontier model and accommodates heterogeneity. We then examine random parameters and latent class models. In these cases, explicit models for firm heterogeneity are built into the stochastic frontier. Comparisons with received results for these models are presented in an application to the U.S. banking industry.
We develop a model of land leasing with agents characterized by unobserved heterogeneity in ability and presence of an off-farm labor market. In this case, decentralized land rental may contribute to equity and efficiency goals and may have several advantages over administrative reallocation. The extent to which this is true empirically is explored using data from three of China's poorest provinces. Land rental markets and administrative reallocation reallocate land to those with lower endowments but the former are more effective in doing so and have a bigger productivity-enhancing effect. Information on hypothetical market participation suggests that reducing transaction costs in land rental markets could help to realize significant additional productivity gains.