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Poverty and Agricultural Growth: Chile in the 1990s

  • Ramón López


    (Department of Agriculture and Resource Economics, University of Maryland)

  • Gustavo Anríquez

This paper analyzes the roles of agriculture in reducing poverty. Following the methodology proposed by López (2002), three channels by which agricultural growth reduces poverty are tested: (i) its effects on the real wage of unskilled workers (and/or its possible effect in reducing their unemployment); (ii) the direct impact of agricultural growth on the income of poor farmers; and, (iii) the effect on real food prices. The paper concludes that the pro-poor role of agricultural expansion is dramatic. Agricultural growth tends to improve all measures of poverty significantly with head count falling around 7.3% as a consequence of a 4.5% increase in agricultural output. An important result is that while the economy-wide effects taking place via food prices and especially the labour market are quantitatively important the direct income effects on farmers are almost negligible.

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Article provided by Food and Agriculture Organization of the United Nations in its journal The Electronic Journal of Agricultural and Development Economics.

Volume (Year): 1 (2004)
Issue (Month): 1 ()
Pages: 6-24

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Handle: RePEc:fao:tejade:v:1:y:2004:i:1:p:6-24
Contact details of provider: Postal: Agricultural Sector in Economic Development Service FAO Viale delle Terme di Caracalla 00153 Rome Italy
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  1. Dante Contreras, 2003. "Poverty and Inequality in a Rapid Growth Economy: Chile 1990-96," Journal of Development Studies, Taylor & Francis Journals, vol. 39(3), pages 181-200.
  2. Berdegue, Julio A. & Ramirez, Eduardo & Reardon, Thomas & Escobar, German, 2001. "Rural Nonfarm Employment and Incomes in Chile," World Development, Elsevier, vol. 29(3), pages 411-425, March.
  3. Alejandra Mizala & Pilar Romaguera & Paulo Henríquez, 1999. "Female labor supply in Chile," Documentos de Trabajo 58, Centro de Economía Aplicada, Universidad de Chile.
  4. Verbeek, M. & Nijman, T., 1990. "Can Cohort Data Be Treated As Genuine Panel Data," Papers 9064, Tilburg - Center for Economic Research.
  5. Miller, Stephen M, 1991. "Monetary Dynamics: An Application of Cointegration and Error-Correction Modeling," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 23(2), pages 139-54, May.
  6. Peter C.B. Phillips & Sam Ouliaris, 1987. "Asymptotic Properties of Residual Based Tests for Cointegration," Cowles Foundation Discussion Papers 847R, Cowles Foundation for Research in Economics, Yale University, revised Jul 1988.
  7. Diewert, W E, 1971. "An Application of the Shephard Duality Theorem: A Generalized Leontief Production Function," Journal of Political Economy, University of Chicago Press, vol. 79(3), pages 481-507, May-June.
  8. Johansen, Soren, 1991. "Estimation and Hypothesis Testing of Cointegration Vectors in Gaussian Vector Autoregressive Models," Econometrica, Econometric Society, vol. 59(6), pages 1551-80, November.
  9. Clements, Michael P. & Mizon, Grayham E., 1991. "Empirical analysis of macroeconomic time series : VAR and structural models," European Economic Review, Elsevier, vol. 35(4), pages 887-917, May.
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