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Poverty and Agricultural Growth: Chile in the 1990s

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  • Ramón López

    ()
    (Department of Agriculture and Resource Economics, University of Maryland)

  • Gustavo Anríquez

Abstract

This paper analyzes the roles of agriculture in reducing poverty. Following the methodology proposed by López (2002), three channels by which agricultural growth reduces poverty are tested: (i) its effects on the real wage of unskilled workers (and/or its possible effect in reducing their unemployment); (ii) the direct impact of agricultural growth on the income of poor farmers; and, (iii) the effect on real food prices. The paper concludes that the pro-poor role of agricultural expansion is dramatic. Agricultural growth tends to improve all measures of poverty significantly with head count falling around 7.3% as a consequence of a 4.5% increase in agricultural output. An important result is that while the economy-wide effects taking place via food prices and especially the labour market are quantitatively important the direct income effects on farmers are almost negligible.

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Bibliographic Info

Article provided by Food and Agriculture Organization of the United Nations in its journal The Electronic Journal of Agricultural and Development Economics.

Volume (Year): 1 (2004)
Issue (Month): 1 ()
Pages: 6-24

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Handle: RePEc:fao:tejade:v:1:y:2004:i:1:p:6-24

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Keywords: Poverty; Rural Poverty; Urban Poverty; Agricultural Growth.;

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  1. Nijman, T.E. & Verbeek, M.J.C.M., 1992. "Can cohort data be treated as genuine panal data?," Open Access publications from Tilburg University urn:nbn:nl:ui:12-153281, Tilburg University.
  2. Phillips, Peter C B & Ouliaris, S, 1990. "Asymptotic Properties of Residual Based Tests for Cointegration," Econometrica, Econometric Society, vol. 58(1), pages 165-93, January.
  3. Miller, Stephen M, 1991. "Monetary Dynamics: An Application of Cointegration and Error-Correction Modeling," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 23(2), pages 139-54, May.
  4. Clements, Michael P. & Mizon, Grayham E., 1991. "Empirical analysis of macroeconomic time series : VAR and structural models," European Economic Review, Elsevier, vol. 35(4), pages 887-917, May.
  5. Dante Contreras, 2003. "Poverty and Inequality in a Rapid Growth Economy: Chile 1990-96," Journal of Development Studies, Taylor & Francis Journals, vol. 39(3), pages 181-200.
  6. Diewert, W E, 1971. "An Application of the Shephard Duality Theorem: A Generalized Leontief Production Function," Journal of Political Economy, University of Chicago Press, vol. 79(3), pages 481-507, May-June.
  7. Johansen, Soren, 1991. "Estimation and Hypothesis Testing of Cointegration Vectors in Gaussian Vector Autoregressive Models," Econometrica, Econometric Society, vol. 59(6), pages 1551-80, November.
  8. Berdegue, Julio A. & Ramirez, Eduardo & Reardon, Thomas & Escobar, German, 2001. "Rural Nonfarm Employment and Incomes in Chile," World Development, Elsevier, vol. 29(3), pages 411-425, March.
  9. Alejandra Mizala & Pilar Romaguera & Paulo Henríquez, 1999. "Female labor supply in Chile," Documentos de Trabajo 58, Centro de Economía Aplicada, Universidad de Chile.
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Cited by:
  1. Ahmed, Sharmina, 2010. "A Reassessment of Agriculture’s Role on the Rural Poverty Reduction Process in Bangladesh," 2010 Conference (54th), February 10-12, 2010, Adelaide, Australia 58875, Australian Agricultural and Resource Economics Society.
  2. William FOSTER & William FOSTER, 2006. "Chilean Agriculture And Major Economic Reforms: Growth, Trade, Poverty And The Environment," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 23, pages 187-214.
  3. Valdes, Alberto & Jara, Esteban, 2007. "Distortions to Agricultural Incentives in Chile," Agricultural Distortions Working Paper 48391, World Bank.

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