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How Big Is Your Neighborhood? Spatial Implications Of Market Participation By Smallholder Livestock Producers

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  • Lapar, Ma. Lucila A.
  • Holloway, Garth J.
  • Ehui, Simeon K.

Abstract

Identifying ways to increase market participation by smallholder producers requires identifying variables that influence market access. This is usually achieved using probit estimation. An important phenomenon affecting entry decision-making is the entry decision of a 'similar' household, where similarity is measured in terms of 'location.' When neighborhood influences are significant, it is important to allow for them in discrete decision contexts, such as probit estimation. This paper, therefore, assesses the magnitude of neighborhood influences in smallholder decisions concerning market entry. The empirical model is based on a cross-section of (110) farms situated in northern Philippines, visited (twice) in the 2000-2001 production year (a panel of 220 observations). The vehicle for analysis is a Bayesian formulation of a standard probit model, but one that allows for spatial autoregression in the decision vector. Estimation requires a Metropolis-step addition to a basic Gibbs sampling algorithm and generates useful insights concerning quantities that are important for market-access policy.

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Bibliographic Info

Paper provided by International Association of Agricultural Economists in its series 2003 Annual Meeting, August 16-22, 2003, Durban, South Africa with number 25860.

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Date of creation: 2003
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Handle: RePEc:ags:iaae03:25860

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Keywords: Livestock Production/Industries;

References

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  1. Chib, Siddhartha, 1996. "Calculating posterior distributions and modal estimates in Markov mixture models," Journal of Econometrics, Elsevier, vol. 75(1), pages 79-97, November.
  2. Stiglitz, Joseph E, 1989. "Markets, Market Failures, and Development," American Economic Review, American Economic Association, vol. 79(2), pages 197-203, May.
  3. Holloway, Garth & Shankar, Bhavani & Rahman, Sanzidur, 2002. "Bayesian spatial probit estimation: a primer and an application to HYV rice adoption," Agricultural Economics, Blackwell, vol. 27(3), pages 383-402, November.
  4. Chib, Siddhartha, 1993. "Bayes regression with autoregressive errors : A Gibbs sampling approach," Journal of Econometrics, Elsevier, vol. 58(3), pages 275-294, August.
  5. Chib, Siddhartha, 1992. "Bayes inference in the Tobit censored regression model," Journal of Econometrics, Elsevier, vol. 51(1-2), pages 79-99.
  6. Feder, Gershon & Just, Richard E & Zilberman, David, 1985. "Adoption of Agricultural Innovations in Developing Countries: A Survey," Economic Development and Cultural Change, University of Chicago Press, vol. 33(2), pages 255-98, January.
  7. Jens Otto Ludwig & Greg Duncan & Joshua C. Pinkston, 2000. "Neighborhood Effects on Economic Self-Sufficiency: Evidence from a Randomized Housing-Mobility Experiment," JCPR Working Papers 159, Northwestern University/University of Chicago Joint Center for Poverty Research.
  8. Lapar, M. L. & Holloway, G. & Ehui, S., 2003. "Policy options promoting market participation among smallholder livestock producers: a case study from the Phillipines," Food Policy, Elsevier, vol. 28(3), pages 187-211, June.
  9. Garth John Holloway & Simeon K. Ehui, 2001. "Demand, Supply and Willingness-to-Pay for Extension Services in an Emerging-Market Setting," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(3), pages 764-768.
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Cited by:
  1. Kathleen P. Bell & Timothy J. Dalton, 2007. "Spatial Economic Analysis in Data-Rich Environments," Journal of Agricultural Economics, Wiley Blackwell, vol. 58(3), pages 487-501, 09.
  2. Wollni, Meike & Andersson, Camilla I.M., 2013. "Spatial patterns of organic agriculture adoption: evidence from Honduras," Discussion Papers 146715, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
  3. Falkowski, Jan, 2013. "Does it matter how much land your neighbour owns? The functioning of land markets in Poland from a social comparison perspective," Factor Markets Working Papers 171, Centre for European Policy Studies.
  4. Rios, Ana R. & Masters, William A. & Shively, Gerald E., 2008. "Linkages between Market Participation and Productivity: Results from a Multi-Country Farm Household Sample," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6145, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  5. Gilles Allaire & Eric Cahuzac & Michel Simioni, 2009. "Contractualisation et diffusion spatiale des mesures agro-environnementales herbagères," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement, INRA Department of Economics, vol. 90(1), pages 23-50.
  6. Wollni, Meike & Andersson, Camilla, 2013. "Spatial effects in organic agriculture adoption in Honduras: the role of social conformity, positive externalities, and information," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 149911, Agricultural and Applied Economics Association.

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