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Supervision and Transaction Costs: Evidence from Rice Farms in Bicol, the Philippines

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Author Info
Evenson, R.E.
Kimhi, A.
DeSilva, S.

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Abstract

In this paper, we analyze supervision activities reported in a cross-section survey of rice farmers in the Bicol region of the Philippines. This survey is unique because it provides supervision data at the farm task level. We present a simple optimization model in which supervision intensity increases the productivity of hired workers, which is assumed to be lower than that of family members due to the transaction costs. The model predicts that supervision intensity will increase with transaction costs. We use different institutional conditions to proxy for transaction costs, and estimate the demand for supervision time for four different classes of rice production tasks. The estimation strategy controls for selectivity in both hiring and supervising. The results show a positive effect of transaction costs on supervision intensity.

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Publisher Info
Paper provided by Yale - Economic Growth Center in its series Papers with number 814.

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Length: 42 pages
Date of creation: 2000
Date of revision:
Handle: RePEc:fth:yalegr:814

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Related research
Keywords: LABOUR MARKET ; COSTS ; SUPERVISORS;

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Find related papers by JEL classification:
O13 - Economic Development, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
J43 - Labor and Demographic Economics - - Particular Labor Markets - - - Agricultural Labor Markets
Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

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  1. Bradley T. Ewing & James E. Payne, 1999. "The Trade-Off Between Supervision and Wages: Evidence of Efficiency Wages from the NLSY," Southern Economic Journal, Southern Economic Association, vol. 66(2), pages 424-432, October.
  2. Erica L. Groshen & Alan B. Krueger, 1990. "The structure of supervision and pay in hospitals," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 43(3), pages 134-146, February.
    Other versions:
  3. Battese, G E & Coelli, T J, 1995. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data," Empirical Economics, Springer, vol. 20(2), pages 325-32.
  4. Neal, Derek, 1993. "Supervision and Wages across Industries," The Review of Economics and Statistics, MIT Press, vol. 75(3), pages 409-17, August. [Downloadable!] (restricted)
  5. Meeusen, Wim & van den Broeck, Julien, 1977. "Efficiency Estimation from Cobb-Douglas Production Functions with Composed Error," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 18(2), pages 435-44, June. [Downloadable!] (restricted)
  6. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July. [Downloadable!] (restricted)
  7. Jeremy I. Bulow & Lawrence H. Summers, 1986. "A Theory of Dual Labor Markets with Application to Industrial Policy, Discrimination and Keynesian Unemployment," NBER Working Papers 1666, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  8. Reifschneider, David & Stevenson, Rodney, 1991. "Systematic Departures from the Frontier: A Framework for the Analysis of Firm Inefficiency," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 32(3), pages 715-23, August. [Downloadable!] (restricted)
  9. Kumbhakar, Subal C & Ghosh, Soumendra & McGuckin, J Thomas, 1991. "A Generalized Production Frontier Approach for Estimating Determinants of Inefficiency in U.S. Dairy Farms," Journal of Business & Economic Statistics, American Statistical Association, vol. 9(3), pages 279-86, July.
  10. Frisvold, George B., 1994. "Does supervision matter? Some hypothesis tests using Indian farm-level data," Journal of Development Economics, Elsevier, vol. 43(2), pages 217-238, April. [Downloadable!] (restricted)
  11. Pitt, Mark M. & Lee, Lung-Fei, 1981. "The measurement and sources of technical inefficiency in the Indonesian weaving industry," Journal of Development Economics, Elsevier, vol. 9(1), pages 43-64, August. [Downloadable!] (restricted)
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