Social Networks and Factor Markets: Panel Data Evidence from Ethiopia

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We investigate the role of an indigenous social network in Ethiopia, the iddir, in facilitating factor market transactions among smallholder farmers. We use detailed longitudinal household survey data and employ fixed effects estimation approaches to identify the effect of iddir membership on factor market transactions among farmers. We find that joining an iddir network improves households’ access to land, labour and credit transactions.

The effect of climate change and adaptation policy on agricultural production in Eastern Africa

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We estimate the production function for agricultural output in Eastern Africa incorporating climate variables disaggregated into growing and non-growing seasons. We find a substantial negative effect of within growing season variance of precipitation. We simulate predicted climate change for the region and find a resulting output reduction of between 1.2% and 4.5%.

Agriculture

Pay-What-You-Want pricing schemes: A self-image perspective

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Pay-What-You-Want (PWYW) pricing schemes are becoming increasingly popular. We develop a model incorporating self-image into the buyer’s utility function and introduce heterogeneity in consumption utility and image-sensitivity, generating different purchase decisions and optimal prices across individuals. When a good’s fixed price is lower than a threshold fair value, PWYW can lead to a lower utility. This may result in a lower purchase rate and higher average price, accounting for previously unexplained field experimental evidence.

Experiments

Price reactions when consumers are concerned about pro-social reputation

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In this paper, we propose a reputation-signalling model of demand for consumer goods containing pro-social characteristics such as a ‘fair trade’ or ‘organic’ certification. We show that reputation signalling can reverse price reactions resembling the crowding-out of pre-existing motives for pro-social behavior seen in situations of volunteering and charitable giving. Finally, using a unique combination of questionnaire and purchase panel data, we present evidence of such reputation-driven reversal of price reactions in the Danish market for organic milk.

Experiments

The Tilling of Land in a Changing Climate: Panel Data Evidence from the Nile Basin of Ethiopia

Submitted by Eugenia Leon on

Empirical studies point to reduced tillage as a means to increase yields and reverse land degradation. A relatively neglected avenue of research concerns why farmers increase tillage frequencies. Using household plot–level panel data from the Nile Basin of Ethiopia, this article applies a random effects ordered probit endogenous switching regression model to empirically investigate the impact of weather events and other conditioning factors on farmers’ choice of tillage intensity and the effect of changing tillage frequencies on differences in farm returns.

Climate Change, Policy Design

Governing agricultural drought: Monitoring using the vegetation condition index

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This paper investigates the spatial and temporal aspect of seasonal agricultural drought in Ethiopia during the cropping season using Vegetation Condition Index. SPOT-VGT S10 NDVI time-series for the period 1998 to 2013 was employed. Five hundred and sixty-seven dekadal images were administered in order to produce the multi-temporal agricultural drought maps. Accordingly, the analysis showed different causes for the nation-wide drought events occurred in the years 1998, 2000, 2002, 2009, and 2010.

Agriculture