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Caste as an Impediment to Trade

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  • Siwan Anderson
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    Abstract

    We compare outcomes across two types of villages in rural India. Villages vary by which caste is dominant (owns the majority of land): either a low or high caste. The key finding is that income is substantially higher for low-caste households residing in villages dominated by a low caste. This seems to be due to a trade breakdown in irrigation water across caste groups. All else equal, lower caste water buyers have agricultural yields which are 45 percent higher if they reside in a village where water sellers are of the same caste compared to one where they are not. (JEL O12, O13, O17, O18, Q15, R23, Z13)

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    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/app.3.1.239
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    Bibliographic Info

    Article provided by American Economic Association in its journal American Economic Journal: Applied Economics.

    Volume (Year): 3 (2011)
    Issue (Month): 1 (January)
    Pages: 239-63

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    Handle: RePEc:aea:aejapp:v:3:y:2011:i:1:p:239-63

    Note: DOI: 10.1257/app.3.1.239
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    References

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    1. Abhijit Banerjee & Lakshmi Iyer, 2005. "History, Institutions, and Economic Performance: The Legacy of Colonial Land Tenure Systems in India," American Economic Review, American Economic Association, vol. 95(4), pages 1190-1213, September.
    2. Jacoby, Hanan G. & Murgai, Rinku & Rehman, Saeed Ur, 2001. "Monopoly power and distribution in fragmented markets : the case of groundwater," Policy Research Working Paper Series 2628, The World Bank.
    3. Akerlof, George A, 1976. "The Economics of Caste and of the Rat Race and Other Woeful Tales," The Quarterly Journal of Economics, MIT Press, vol. 90(4), pages 599-617, November.
    4. Timothy Besley & Robin Burgess, 1998. "Land Reform, Poverty Reduction and Growth: Evidence from India," STICERD - Development Economics Papers - From 2008 this series has been superseded by Economic Organisation and Public Policy Discussion Papers 13, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
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    Cited by:
    1. Ira Gang & Kunal Sen & Myeong-Su Yun, 2011. "Is Caste Destiny? Occupational Diversification among Dalits in Rural India," Working Papers 309, Institut für Ost- und Südosteuropaforschung (Institute for East and South-East European Studies).
    2. Natalia Montinari & Antonio Nicolò & Regine Oexl, 2012. "Mediocrity and Induced Reciprocity," Jena Economic Research Papers 2012-053, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
    3. repec:cge:warwcg:114 is not listed on IDEAS
    4. Abhijit Banerji & Gauri Khanna & J. V. Meenakshi, 2010. "Social Contracts, Markets And Efficiency -- Groundwater Irrigation In North India," Working papers 183, Centre for Development Economics, Delhi School of Economics.
    5. Surajeet Chakravarty & Miguel A. Fonseca, 2012. "The Effect of Social Fragmentation on Public Good Provision: an Experimental Study," Discussion Papers 1207, Exeter University, Department of Economics.
    6. Erlend Berg & Maitreesh Ghatak & R Manjula & D Rajasekhar & Sanchari Roy, 2013. "Motivating Knowledge Agents: Can Incentive Pay Overcome Social Distance?," STICERD - Economic Organisation and Public Policy Discussion Papers Series 42, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    7. repec:cge:warwcg:133 is not listed on IDEAS
    8. Erlend Berg & Maitreesh Ghatak & R Manjula & D Rajasekhar & Sanchari Roy, 2014. "Motivating knowledge agents: Can incentive pay overcome social distance?," The Centre for Market and Public Organisation 13/316, Department of Economics, University of Bristol, UK.
    9. Kumar, Sunil Mitra, 2013. "Does Access to Formal Agricultural Credit Depend on Caste?," World Development, Elsevier, vol. 43(C), pages 315-328.
    10. Choy, James, 2013. "A Theory of Cooperation through Social Division, with Evidence from Nepal," CAGE Online Working Paper Series 115, Competitive Advantage in the Global Economy (CAGE).
    11. Siwan Anderson & Patrick Francois & Ashok Kotwal, . "One Kind of DemocracyAbstract: This paper explores the performance of rural governance institutions (Gram Panchayats) in Maharashtra, India. The results of a detailed set of household and village surv," The Centre for Market and Public Organisation 12/292, Department of Economics, University of Bristol, UK.
    12. Sharmistha Self & Richard Grabowski, 2013. "Female Autonomy In Rural North India: Impact Of Economic, Social, And Political Factors," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 38(1), pages 59-82, March.
    13. Jacoby, Hanan G. & Mansuri, Ghazala, 2011. "Crossing boundaries : gender, caste and schooling in rural Pakistan," Policy Research Working Paper Series 5710, The World Bank.

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