Shadow vs. market prices in explaining land allocation: Subsistence maize cultivation in rural Mexico
AbstractPrices may fail to explain farmers' land allocation if the relevant decision prices are "shadow prices" that deviate from market prices. This may be the case for farmers who attach significant non-market values to their crops. I theoretically explain why land allocation may not respond to market signals even if transaction costs are not binding. I use nationally representative rural household data from Mexico to show that shadow prices better explain the land subsistence farmers allocate to traditional maize in this center of maize diversity. I discuss the importance of non-market values in understanding supply response and on-farm conservation of traditional crops.
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Bibliographic InfoArticle provided by Elsevier in its journal Food Policy.
Volume (Year): 36 (2011)
Issue (Month): 5 (October)
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Web page: http://www.elsevier.com/locate/foodpol
Land allocation Shadow prices Non-market values Traditional crops On-farm conservation Mexico;
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