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Shadow vs. market prices in explaining land allocation: Subsistence maize cultivation in rural Mexico


  • Arslan, AslIhan


Prices may fail to explain farmers' land allocation if the relevant decision prices are "shadow prices" that deviate from market prices. This may be the case for farmers who attach significant non-market values to their crops. I theoretically explain why land allocation may not respond to market signals even if transaction costs are not binding. I use nationally representative rural household data from Mexico to show that shadow prices better explain the land subsistence farmers allocate to traditional maize in this center of maize diversity. I discuss the importance of non-market values in understanding supply response and on-farm conservation of traditional crops.

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  • Arslan, AslIhan, 2011. "Shadow vs. market prices in explaining land allocation: Subsistence maize cultivation in rural Mexico," Food Policy, Elsevier, vol. 36(5), pages 605-613, October.
  • Handle: RePEc:eee:jfpoli:v:36:y:2011:i:5:p:605-613

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    References listed on IDEAS

    1. Beghin, John C. & Jensen, Helen H., 2008. "Farm policies and added sugars in US diets," Food Policy, Elsevier, vol. 33(6), pages 480-488, December.
    2. Alston, Julian M. & Sumner, Daniel A. & Vosti, Stephen A., 2008. "Farm subsidies and obesity in the United States: National evidence and international comparisons," Food Policy, Elsevier, vol. 33(6), pages 470-479, December.
    3. Ghosh, Koel & Senauer, Benjamin, 2009. "Adequacy of Federal School Lunch Reimbursement Adjustments," Choices, Agricultural and Applied Economics Association, vol. 24(3).
    4. Cora Peterson, 2009. "A comparative cost analysis of commodity foods from the U.S. Department of Agriculture in the National School Lunch Program," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 28(4), pages 626-654.
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    1. repec:spr:jqecon:v:15:y:2017:i:3:d:10.1007_s40953-016-0058-z is not listed on IDEAS
    2. Parisa Aghajanzadeh-Darzi & Pierre-Alain Jayet & Athanasios Petsakos, 2017. "Improvement of a Bio-Economic Mathematical Programming Model in the Case of On-Farm Source Inputs and Outputs," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 15(3), pages 489-508, September.


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