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Crop diversification, downside risk exposure, and crop production in the Niger basin of Benin

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  • Lokonon, Boris Odilon Kounagbè

Abstract

This paper investigates the extent to which crop diversification affects farm productivity and production risk in the Niger basin of Benin. The paper relies on a moment-based approach, and estimates a stochastic production function which captures the effects of crop diversification on the mean, the variance, and the skewness by controlling for the unobservable heterogeneities related to institutional factors and village specific conditions. The findings reveal that diversification across crops affects positively the mean, the variance, and the skewness, with the effects being statistically significant only in the case of the mean. Thus, diversification is important in reducing the exposure to downside risk.

Suggested Citation

  • Lokonon, Boris Odilon Kounagbè, 2016. "Crop diversification, downside risk exposure, and crop production in the Niger basin of Benin," 2016 AAAE Fifth International Conference, September 23-26, 2016, Addis Ababa, Ethiopia 246389, African Association of Agricultural Economists (AAAE).
  • Handle: RePEc:ags:aaae16:246389
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    References listed on IDEAS

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    1. Blank, Steven C., 1990. "Returns To Limited Crop Diversification," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 15(02), December.
    2. Salvatore Di Falco & Marcella Veronesi, 2014. "Managing Environmental Risk in Presence of Climate Change: The Role of Adaptation in the Nile Basin of Ethiopia," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 57(4), pages 553-577, April.
    3. Smale, Melinda & Bellon, Mauricio R. & Aguirre, Alfonso, 1998. "Variety Characteristics And The Land Allocation Decisions Of Farmers In A Center Of Maize Diversity," 1998 Annual meeting, August 2-5, Salt Lake City, UT 20831, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. Tadesse, Dawit & Blank, Steven C., 2003. "Cultivar Diversity: A Neglected Risk Management Strategy," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 28(02), August.
    5. Richard E. Just & Rulon D. Pope, 1979. "Production Function Estimation and Related Risk Considerations," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 61(2), pages 276-284.
    6. Stock, James H & Wright, Jonathan H & Yogo, Motohiro, 2002. "A Survey of Weak Instruments and Weak Identification in Generalized Method of Moments," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(4), pages 518-529, October.
    7. Menezes, C & Geiss, C & Tressler, J, 1980. "Increasing Downside Risk," American Economic Review, American Economic Association, vol. 70(5), pages 921-932, December.
    8. Meng, Erika C.H. & Smale, Melinda & Ruifa, Hu & Brennan, John P. & Godden, David P., 1999. "Measurement of Crop Genetic Diversity in Economic Analysis," 1999 Conference (43th), January 20-22, 1999, Christchurch, New Zealand 124089, Australian Agricultural and Resource Economics Society.
    9. Salvatore Di Falco & Marcella Veronesi & Mahmud Yesuf, 2011. "Does Adaptation to Climate Change Provide Food Security? A Micro-Perspective from Ethiopia," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 93(3), pages 825-842.
    10. Antle, John M, 1983. "Testing the Stochastic Structure of Production: A Flexible Moment-based Approach," Journal of Business & Economic Statistics, American Statistical Association, vol. 1(3), pages 192-201, July.
    11. Jean-Paul Chavas, 2011. "On the microeconomics of diversification under learning," Journal of Economics, Springer, vol. 104(1), pages 25-47, September.
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    More about this item

    Keywords

    Cotton; diversification; downside risk; Niger basin of Benin; Crop Production/Industries; Production Economics; Risk and Uncertainty;

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