How costly is it for poor farmers to lift themselves out of poverty?
AbstractThe main objective of this paper is to provide estimates of the cost of moving out of subsistence for Madagascar's farmers. The analysis is based on a simple asset-return model of occupational choice. Estimates suggest that the entry (sunk) cost associated with moving out of subsistence can be quite large - somewhere between 124 and 153 percent of a subsistence farmer's annual production. Our results make it possible to identify farm characteristics likely to generate large gains, if moved out of subsistence, yielding useful information for the targeting of trade-adjustment assistance programs.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 3881.
Date of creation: 01 Apr 2006
Date of revision:
Markets and Market Access; Rural Poverty Reduction; Economic Theory&Research; Agribusiness; Access to Markets;
This paper has been announced in the following NEP Reports:
- NEP-AGR-2006-04-22 (Agricultural Economics)
- NEP-ALL-2006-04-22 (All new papers)
- NEP-DEV-2006-04-22 (Development)
- NEP-LTV-2006-04-22 (Unemployment, Inequality & Poverty)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Roberts, Mark J & Tybout, James R, 1997. "The Decision to Export in Colombia: An Empirical Model of Entry with Sunk Costs," American Economic Review, American Economic Association, vol. 87(4), pages 545-64, September.
- Sanghamitra Das & Mark J. Roberts & James R. Tybout, 2001.
"Market Entry Costs, Producer Heterogeneity, and Export Dynamics,"
NBER Working Papers
8629, National Bureau of Economic Research, Inc.
- Sanghamitra Das & Mark J. Roberts & James R. Tybout, 2007. "Market Entry Costs, Producer Heterogeneity, and Export Dynamics," Econometrica, Econometric Society, vol. 75(3), pages 837-873, 05.
- Sanghamitra Das & Mark J. Roberts & James R. Tybout, 2001. "Market entry costs, producer heterogeneity and export dynamics," Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers 03-10, Indian Statistical Institute, New Delhi, India.
- Silber, William L, 1974. "The Market for Federal Agency Securities: Is There an Optimum Size of Issue?," The Review of Economics and Statistics, MIT Press, vol. 56(1), pages 14-22, February.
- McMillan, Margaret & Rodrik, Dani & Welch, Karen Horn, 2002.
"When Economic Reform Goes Wrong: Cashews in Mozambique,"
Working Paper Series
rwp02-028, Harvard University, John F. Kennedy School of Government.
- Horn Welch, Karen & McMillan, Margaret & Rodrik, Dani, 2002. "When Economic Reform Goes Wrong: Cashews in Mozambique," CEPR Discussion Papers 3519, C.E.P.R. Discussion Papers.
- Margaret McMillan & Dani Rodrik & Karen Horn Welch, 2002. "When Economic Reform Goes Wrong: Cashews in Mozambique," NBER Working Papers 9117, National Bureau of Economic Research, Inc.
- Vakis, Renos & Sadoulet, Elisabeth & de Janvry, Alain, 2003.
"Measuring transactions costs from observed behavior : market choices in Peru,"
CUDARE Working Paper Series
962, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy.
- Vakis, Renos & Sadoulet, Elisabeth & de Janvry, Alain, 2003. "Measuring Transactions Costs from Observed Behavior: Market Choices in Peru," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt7p81h66q, Department of Agricultural & Resource Economics, UC Berkeley.
- Dixit, A., 1988.
"Entry And Exit Decisions Under Uncertainty,"
91, Princeton, Department of Economics - Financial Research Center.
- Porto, Guido G., 2005.
"Informal export barriers and poverty,"
Journal of International Economics,
Elsevier, vol. 66(2), pages 447-470, July.
- Brambilla, Irene & Porto, Guido, 2005.
"Farm Productivity and Market Structure: Evidence from Cotton Reforms in Zambia,"
5, Yale University, Department of Economics.
- Brambilla, Irene & Porto, Guido G., 2006. "Farm productivity and marketstructure : evidence from cotton reforms in Zambia," Policy Research Working Paper Series 3904, The World Bank.
- Irene Brambilla & Guido G. Porto, 2005. "Farm Productivity and Market Structure. Evidence From Cotton Reforms in Zambia," Working Papers 919, Economic Growth Center, Yale University.
- Barrett, Christopher B., 1997. "Food marketing liberalization and trader entry: Evidence from Madagascar," World Development, Elsevier, vol. 25(5), pages 763-777, May.
- Geroski, P. A., 1995. "What do we know about entry?," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 421-440, December.
- Bruce E. Hansen, 2000.
"Sample Splitting and Threshold Estimation,"
Econometric Society, vol. 68(3), pages 575-604, May.
- Dorosh, Paul A. & Stifel, David & Minten, Bart, 2003. "Transaction costs and agricultural productivity," MSSD discussion papers 56, International Food Policy Research Institute (IFPRI).
- Hotchkiss, Julie L, 1991. "The Definition of Part-Time Employment: A Switching Regression Model with Unknown Sample Selection," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 32(4), pages 899-917, November.
- Owen, Robert F & Ulph, David, 2002. "Sunk Costs, Market Access, Economic Integration and Welfare," Review of International Economics, Wiley Blackwell, vol. 10(3), pages 539-55, August.
- Stephen Martin, 2002. "Sunk Cost and Entry," Review of Industrial Organization, Springer, vol. 20(4), pages 291-304, June.
- Richard Baldwin & Paul R. Krugman, 1986.
"Persistent Trade Effects of Large Exchage Rate Shocks,"
NBER Working Papers
2017, National Bureau of Economic Research, Inc.
- Baldwin, Richard & Krugman, Paul, 1989. "Persistent Trade Effects of Large Exchange Rate Shocks," The Quarterly Journal of Economics, MIT Press, vol. 104(4), pages 635-54, November.
- Matusz, Steven J. & Tarr, David, 1999. "Adjusting to trade policy reform," Policy Research Working Paper Series 2142, The World Bank.
- Baumol, William J & Willig, Robert D, 1981. "Fixed Costs, Sunk Costs, Entry Barriers, and Sustainability of Monopoly," The Quarterly Journal of Economics, MIT Press, vol. 96(3), pages 405-31, August.
- Sivadasan Jagadeesh, 2009. "Barriers to Competition and Productivity: Evidence from India," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 9(1), pages 1-66, September.
- Dani Rodrik, 1992. "The Limits of Trade Policy Reform in Developing Countries," Journal of Economic Perspectives, American Economic Association, vol. 6(1), pages 87-105, Winter.
- Richard Baldwin, 1989. "Sunk-Cost Hysteresis," NBER Working Papers 2911, National Bureau of Economic Research, Inc.
- Lee, Lung-Fei, 1979. "Identification and Estimation in Binary Choice Models with Limited (Censored) Dependent Variables," Econometrica, Econometric Society, vol. 47(4), pages 977-96, July.
- Michael Lokshin & Zurab Sajaia, 2004. "Maximum likelihood estimation of endogenous switching regression models," Stata Journal, StataCorp LP, vol. 4(3), pages 282-289, September.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi).
If references are entirely missing, you can add them using this form.