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Rural Policies and Poverty in Tanzania: an Agricultural Household Model-Based Assessment

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  • Luca Tiberti
  • Marco Tiberti

Abstract

The main objective of this study is to develop a robust and comprehensive tool to evaluate the effect on households’ welfare of different agricultural policies in Tanzania. This is done through a non-separable agricultural household model where production and consumption decisions are considered. In particular, we look at labour market failure, since this is among the major constraints in a context like rural Tanzania. Non-separability implies that production and consumption decisions are interlinked and that labour allocation is likely to be determined by shadow wages rather than market wages. A two-stage estimation strategy is adopted: the shadow price of family labour is first estimated and then included into the production and demand systems. The impact of a number of agricultural policies on poverty is then estimated. In particular, we evaluate the impact of policies established by the Agricultural Sector Development Programme, as well as changes in food prices.

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Paper provided by CIRPEE in its series Cahiers de recherche with number 1229.

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Date of creation: 2012
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Handle: RePEc:lvl:lacicr:1229

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Keywords: Agricultural household models; poverty; agricultural policies; Tanzania;

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  1. Pauw, Kalie & Thurlow, James, 2010. "Agricultural Growth, Poverty, and Nutrition in Tanzania," 2010 AAAE Third Conference/AEASA 48th Conference, September 19-23, 2010, Cape Town, South Africa, African Association of Agricultural Economists (AAAE);Agricultural Economics Association of South Afri 95974, African Association of Agricultural Economists (AAAE);Agricultural Economics Association of South Africa (AEASA).
  2. J. Taylor & Irma Adelman, 2003. "Agricultural Household Models: Genesis, Evolution, and Extensions," Review of Economics of the Household, Springer, Springer, vol. 1(1), pages 33-58, January.
  3. Jacoby, Hanan G, 1993. "Shadow Wages and Peasant Family Labour Supply: An Econometric Application to the Peruvian Sierra," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 60(4), pages 903-21, October.
  4. Davidson, R. & Duclos, J.-Y., 1998. "Statistical Inference for Stochastic Dominance and for the Measurement of Poverty and Inequality," G.R.E.Q.A.M., Universite Aix-Marseille III 98a14, Universite Aix-Marseille III.
  5. de Janvry, Alain & Fafchamps, Marcel & Sadoulet, Elisabeth, 1991. "Peasant Household Behaviour with Missing Markets: Some Paradoxes Explained," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 101(409), pages 1400-417, November.
  6. Ravallion, Martin & Datt, Gaurav, 1996. "How Important to India's Poor Is the Sectoral Composition of Economic Growth?," World Bank Economic Review, World Bank Group, World Bank Group, vol. 10(1), pages 1-25, January.
  7. Christian H.C.A. Henning & Arne Henningsen, 2007. "Modeling Farm Households' Price Responses in the Presence of Transaction Costs and Heterogeneity in Labor Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, Agricultural and Applied Economics Association, vol. 89(3), pages 665-681.
  8. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-26, June.
  9. Abdulai, Awudu & Regmi, Punya Prasad, 2000. "Estimating labor supply of farm households under nonseparability: empirical evidence from Nepal," Agricultural Economics, Blackwell, Blackwell, vol. 22(3), pages 309-320, April.
  10. Henning, Christian H.C.A. & Henningsen, Arne, 2007. "AJAE Appendix: Modeling Farm Households' Price Responses in the Presence of Transaction Costs and Heterogeneity in Labor Markets," American Journal of Agricultural Economics Appendices, Agricultural and Applied Economics Association, Agricultural and Applied Economics Association, vol. 89(3), August.
  11. Dorward, Andrew & Kydd, Jonathan & Morrison, Jamie & Urey, Ian, 2004. "A Policy Agenda for Pro-Poor Agricultural Growth," World Development, Elsevier, vol. 32(1), pages 73-89, January.
  12. Hazell, Peter B. & Haggblade, Steven, 1990. "Rural - urban growth linkages in India," Policy Research Working Paper Series 430, The World Bank.
  13. Fulginiti, Lilyan E. & Perrin, Richard, 1990. "Argentine Agricultural Policy in a Multiple-Input, Multiple-Output Framework," Staff General Research Papers 277, Iowa State University, Department of Economics.
  14. Olson, Dennis & Zoubi, Taisier A., 2011. "Efficiency and bank profitability in MENA countries," Emerging Markets Review, Elsevier, Elsevier, vol. 12(2), pages 94-110, June.
  15. Haggblade, Steven & Hazell, Peter B. R. & Reardon, Thomas, 2009. "Transforming the rural nonfarm economy: Opportunities and threats in the developing world," Issue briefs, International Food Policy Research Institute (IFPRI) 58, International Food Policy Research Institute (IFPRI).
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