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How Big Is Your Neighborhood? Spatial Implications Of Market Participation By Smallholder Livestock Producers

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  • Lapar, Ma. Lucila A.
  • Holloway, Garth J.
  • Ehui, Simeon K.

Abstract

Identifying ways to increase market participation by smallholder producers requires identifying variables that influence market access. This is usually achieved using probit estimation. An important phenomenon affecting entry decision-making is the entry decision of a 'similar' household, where similarity is measured in terms of 'location.' When neighborhood influences are significant, it is important to allow for them in discrete decision contexts, such as probit estimation. This paper, therefore, assesses the magnitude of neighborhood influences in smallholder decisions concerning market entry. The empirical model is based on a cross-section of (110) farms situated in northern Philippines, visited (twice) in the 2000-2001 production year (a panel of 220 observations). The vehicle for analysis is a Bayesian formulation of a standard probit model, but one that allows for spatial autoregression in the decision vector. Estimation requires a Metropolis-step addition to a basic Gibbs sampling algorithm and generates useful insights concerning quantities that are important for market-access policy.

Suggested Citation

  • Lapar, Ma. Lucila A. & Holloway, Garth J. & Ehui, Simeon K., 2003. "How Big Is Your Neighborhood? Spatial Implications Of Market Participation By Smallholder Livestock Producers," 2003 Annual Meeting, August 16-22, 2003, Durban, South Africa 25860, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae03:25860
    DOI: 10.22004/ag.econ.25860
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    References listed on IDEAS

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    Cited by:

    1. Kathleen P. Bell & Timothy J. Dalton, 2007. "Spatial Economic Analysis in Data‐Rich Environments," Journal of Agricultural Economics, Wiley Blackwell, vol. 58(3), pages 487-501, September.
    2. Silveira Santos, Luís & Proença, Isabel, 2019. "The inversion of the spatial lag operator in binary choice models: Fast computation and a closed formula approximation," Regional Science and Urban Economics, Elsevier, vol. 76(C), pages 74-102.
    3. Fadare, Olusegun Ayodeji & Akerele, Dare & Toritseju, Begho, 2014. "Factors Influencing Adoption Decisions Of Maize Farmers In Nigeria," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 2(3), pages 1-10, July.
    4. Ali,Rubaba & Barra,Alvaro Federico & Berg,Claudia N. & Damania,Richard & Nash,John D. & Russ,Jason Daniel, 2015. "Agricultural technology choice and transport," Policy Research Working Paper Series 7272, The World Bank.
    5. Falkowski, Jan, 2013. "Does it matter how much land your neighbour owns? The functioning of land markets in Poland from a social comparison perspective," Factor Markets Working Papers 171, Centre for European Policy Studies.
    6. Rios, Ana R. & Masters, William A. & Shively, Gerald E., 2008. "Linkages between Market Participation and Productivity: Results from a Multi-Country Farm Household Sample," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6145, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    7. Wollni, Meike & Andersson, Camilla, 2014. "Spatial patterns of organic agriculture adoption: Evidence from Honduras," Ecological Economics, Elsevier, vol. 97(C), pages 120-128.
    8. Gilles Allaire & Eric Cahuzac & Michel Simioni, 2009. "Contractualisation et diffusion spatiale des mesures agro-environnementales herbagères," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement, INRA Department of Economics, vol. 90(1), pages 23-50.
    9. Wollni, Meike & Andersson, Camilla I.M., 2013. "Spatial effects in organic agriculture adoption in Honduras: the role of social conformity, positive externalities, and information," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 149911, Agricultural and Applied Economics Association.

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    Keywords

    Livestock Production/Industries;

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