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Simulating Farm Household Poverty: From Passive Victims to Adaptive Agents

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  • Schreinemachers, Pepijn
  • Berger, Thomas
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    Abstract

    Existing microeconomic models for simulating poverty heavily rely on static projection from statistical inference. When used for simulation these models tend to conceive farm households as passive victims and thereby underestimate their resilience and adaptive capacity. Farming systems research has much to contribute to the research on poverty by bringing in a detailed understanding of farm household decision-making, which directly relates to their adaptive capacity. This paper presents a novel methodology to simulate poverty dynamics using a farming systems approach. The methodology is based on mathematical programming of farm households but adds three innovations: First, poverty levels are quantified by including a three-step budgeting system, including a savings model, a Working-Leser model, and an Almost Ideal Demand System. Second, the model is extended with a disinvestment model to simulate farm household coping strategies to food insecurity. Third, multi-agent systems are used to tailor each mathematical program to a real-world household and so to capture the heterogeneity of opportunities and constraints at the farm level as well as to quantify the distributional effects of change. An empirical application to Uganda illustrates the methodology. The method opens exciting new prospects for applying farming systems research and multi-agent systems to poverty analysis and the ex ante assessment of alternative policy interventions.

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    Bibliographic Info

    Paper provided by International Association of Agricultural Economists in its series 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia with number 25479.

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    Date of creation: 2006
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    Handle: RePEc:ags:iaae06:25479

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    Keywords: Food Security and Poverty;

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    1. Balmann, Alfons, 1997. "Farm-Based Modelling of Regional Structural Change: A Cellular Automata Approach," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 24(1), pages 85-108.
    2. Hazell, P. B. R. & Roell, Ailsa, 1983. "Rural growth linkages: household expenditure patterns in Malaysia and Nigeria," Research reports 41, International Food Policy Research Institute (IFPRI).
    3. Kathrin Happe, 2005. "Agricultural policies and farm structures - agent-based simulation and application to EU-policy reform," Others 0504011, EconWPA.
    4. Christiaensen, Luc & Scott, Christopher & Wodon, Quentin, 2002. "Poverty Measurement and Analysis," MPRA Paper 45362, University Library of Munich, Germany.
    5. Johnson, Robin & Rossmiller, George Edward & Sandiford-Rossmiller, Frances, 2003. "Ag econ angst crisis revisited," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 47(2), June.
    6. Datt, Gaurav & Jolliffe, Dean, 2005. "Poverty in Egypt: Modeling and Policy Simulations," Economic Development and Cultural Change, University of Chicago Press, vol. 53(2), pages 327-46, January.
    7. Joachim von Braun, 2005. "Agricultural economics and distributional effects," Agricultural Economics, International Association of Agricultural Economists, vol. 32(s1), pages 1-20, 01.
    8. Graham Pyatt, 2003. "An Alternative Approach to Poverty Analysis," Economic Systems Research, Taylor & Francis Journals, vol. 15(2), pages 113-133.
    9. Berger, Thomas, 2001. "Agent-based spatial models applied to agriculture: a simulation tool for technology diffusion, resource use changes and policy analysis," Agricultural Economics, Blackwell, vol. 25(2-3), pages 245-260, September.
    10. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-26, June.
    11. Holden, Stein & Shiferaw, Bekele, 2004. "Land degradation, drought and food security in a less-favoured area in the Ethiopian highlands: a bio-economic model with market imperfections," Agricultural Economics, Blackwell, vol. 30(1), pages 31-49, January.
    12. Shiferaw T. Feleke & Richard L. Kilmer & Christina H. Gladwin, 2005. "Determinants of food security in Southern Ethiopia at the household level," Agricultural Economics, International Association of Agricultural Economists, vol. 33(3), pages 351-363, November.
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    Cited by:
    1. Schreinemachers, Pepijn & Berger, Thomas & Aune, Jens B., 2007. "Simulating soil fertility and poverty dynamics in Uganda: A bio-economic multi-agent systems approach," Ecological Economics, Elsevier, vol. 64(2), pages 387-401, December.

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