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Poverty and Agricultural Growth: Chile in the 1990s

Author

Listed:
  • Ramón López

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

  • Gustavo Anríquez

Abstract

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.

Suggested Citation

  • Ramón López & Gustavo Anríquez, 2004. "Poverty and Agricultural Growth: Chile in the 1990s," The Electronic Journal of Agricultural and Development Economics, Food and Agriculture Organization of the United Nations, vol. 1(1), pages 6-24.
  • Handle: RePEc:fao:tejade:v:1:y:2004:i:1:p:6-24
    as

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    References listed on IDEAS

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    1. Verbeek, Marno & Nijman, Theo, 1992. "Can Cohort Data Be Treated as Genuine Panel Data?," Empirical Economics, Springer, vol. 17(1), pages 9-23.
    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.
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    4. 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 139-154, May.
    5. 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.
    6. Alejandra Mizala & Pilar Romaguera & Paulo Henríquez, 1999. "Female labor supply in Chile," Documentos de Trabajo 58, Centro de Economía Aplicada, Universidad de Chile.
    7. Hansen, Bruce E., 1992. "Efficient estimation and testing of cointegrating vectors in the presence of deterministic trends," Journal of Econometrics, Elsevier, vol. 53(1-3), pages 87-121.
    8. 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.
    9. Johansen, Soren, 1991. "Estimation and Hypothesis Testing of Cointegration Vectors in Gaussian Vector Autoregressive Models," Econometrica, Econometric Society, vol. 59(6), pages 1551-1580, November.
    10. 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.
    11. Phillips, Peter C B & Ouliaris, S, 1990. "Asymptotic Properties of Residual Based Tests for Cointegration," Econometrica, Econometric Society, vol. 58(1), pages 165-193, January.
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    Citations

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    Cited by:

    1. Ahmed, Sharmina, 2010. "A Reassessment of Agriculture’s Role on the Rural Poverty Reduction Process in Bangladesh," 2010 Conference (54th), February 10-12, 2010, Adelaide, Australia 58875, Australian Agricultural and Resource Economics Society.
    2. William FOSTER & William FOSTER, 2006. "Chilean Agriculture And Major Economic Reforms: Growth, Trade, Poverty And The Environment," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 23, pages 187-214.
    3. Valdes, Alberto & Jara, Esteban, 2007. "Distortions to Agricultural Incentives in Chile," Agricultural Distortions Working Paper 48391, World Bank.

    More about this item

    Keywords

    Poverty; Rural Poverty; Urban Poverty; Agricultural Growth.;

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • J43 - Labor and Demographic Economics - - Particular Labor Markets - - - Agricultural Labor Markets
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations
    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General

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