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Do farmers choose to be inefficient? Evidence from Bicol

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  • Larson, Donald F.
  • Plessmann, Frank

Abstract

Farming households that differ in their ability or willingness to take on risks are likely to allocate resources and effort among income producing activities differently with consequences for productivity. In this paper we measure voluntary and involuntary departures from efficiency for rice producing households in the Bicol region of the Philippines. We take advantage of a panel of observations on households from 1978, 1983 and 1994. Available monthly weather data and survey information on planting times allows us to create household specific measures of weather shocks, which we use in our analysis. We find evidence that diversification and input choices do affect efficiency outcomes among farmers, although these effects are not dominant; accumulated wealth, past decisions to invest, favorable market conditions, and propitious weather are also important determinants of efficiency outcomes among Bicol rice farmers. Our findings suggest that the costs of incomplete formal and informal insurance markets are higher for poorer farmers.

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  • Larson, Donald F. & Plessmann, Frank, 2009. "Do farmers choose to be inefficient? Evidence from Bicol," Journal of Development Economics, Elsevier, vol. 90(1), pages 24-32, September.
    • Handle: RePEc:eee:deveco:v:90:y:2009:i:1:p:24-32
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    3. Farrin, Kathleen M. & Miranda, Mario J., 2013. "Premium Benefits? A Heterogeneous Agent Model of Credit-Linked Index Insurance and Farm Technology Adoption," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 149666, Agricultural and Applied Economics Association.
    4. Rie Muraoka & Tomoya Matsumoto & Songqing Jin & Keijiro Otsuka, 2016. "On the Possibility of a Maize Green Revolution in the Highlands of Kenya: An Assessment of Emerging Intensive Farming Systems," Natural Resource Management and Policy, in: Keijiro Otsuka & Donald F. Larson (ed.), In Pursuit of an African Green Revolution, edition 1, chapter 0, pages 145-164, Springer.
    5. Cortés, Darwin & Santamaría, Julieth & Vargas, Juan F., 2016. "Economic shocks and crime: Evidence from the crash of Ponzi schemes," Journal of Economic Behavior & Organization, Elsevier, vol. 131(PA), pages 263-275.
    6. Larson, Donald F. & Gurara, Daniel Zerfu, 2013. "A conceptual model of incomplete markets and the consequences for technology adoption policies in Ethiopia," Policy Research Working Paper Series 6681, The World Bank.
    7. Renato Villano & Euan Fleming, 2006. "Technical Inefficiency and Production Risk in Rice Farming: Evidence from Central Luzon Philippines," Asian Economic Journal, East Asian Economic Association, vol. 20(1), pages 29-46, March.
    8. Kathleen Brüssow & Anja Faße & Ulrike Grote, 2017. "Is Sustainable Intensification Pro-Poor? Evidence from Small-Scale Farmers in Rural Tanzania," Resources, MDPI, vol. 6(3), pages 1-16, September.
    9. Yamauchi, Futoshi & Larson, Donald F., 2019. "Long-term impacts of an unanticipated spike in food prices on child growth in Indonesia," World Development, Elsevier, vol. 113(C), pages 330-343.
    10. Chiputwa, Brian & Spielman, David J. & Qaim, Matin, 2015. "Food Standards, Certification, and Poverty among Coffee Farmers in Uganda," World Development, Elsevier, vol. 66(C), pages 400-412.
    11. Areal, Francisco José & Balcombe, Kevin & Rapsomanikis, George, 2016. "Testing for bubbles in agriculture commodity markets," Economia Agraria y Recursos Naturales, Spanish Association of Agricultural Economists, vol. 16(01), June.
    12. Butzer, Rita & Larson, Donald F. & Mundlak, Yair, 2002. "Determinants Of Agricultural Growth In Thailand, Indonesia And The Philippines," Discussion Papers 14979, Hebrew University of Jerusalem, Department of Agricultural Economics and Management.
    13. Bjorn Van Campenhout & Emmanuel Bizimungu, 2018. "Risk and returns of sustainable crop intensification: The case of smallholder rice and potato farmers in Uganda," Development Policy Review, Overseas Development Institute, vol. 36(S2), pages 605-633, September.
    14. Mundlak, Yair & Larson, Donald F. & Butzer, Rita, 2004. "Agricultural dynamics in Thailand, Indonesia and the Philippines," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 48(1), pages 1-32.
    15. Larson, Donald & Savastano, Sara & Murray, Siobhan & Palacios-Lopez, Amparo, 2015. "Are Women Less Productive Farmers? How Markets and Risk Affect Fertilizer Use, Productivity, and Measured Gender Effects in Uganda," 2015 Conference, August 9-14, 2015, Milan, Italy 212032, International Association of Agricultural Economists.
    16. Sanjaya DeSilva, 2011. "Access to Markets and Farm Efficiency: A Study of Rice Farms in the Bicol Region, Philippines," Economics Working Paper Archive wp_687, Levy Economics Institute.
    17. Larson, Donald F. & Dinar, Ariel & Frisbie, J. Aapris, 2011. "Agriculture and the clean development mechanism," Policy Research Working Paper Series 5621, The World Bank.

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