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


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


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

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    References listed on IDEAS

    1. Jens Otto Ludwig & Greg Duncan & Joshua C. Pinkston, 2000. "Neighborhood Effects on Economic Self-Sufficiency: Evidence from a Randomized Housing-Mobility Experiment," JCPR Working Papers 159, Northwestern University/University of Chicago Joint Center for Poverty Research.
    2. Lapar, M. L. & Holloway, G. & Ehui, S., 2003. "Policy options promoting market participation among smallholder livestock producers: a case study from the Phillipines," Food Policy, Elsevier, vol. 28(3), pages 187-211, June.
    3. Chib, Siddhartha, 1993. "Bayes regression with autoregressive errors : A Gibbs sampling approach," Journal of Econometrics, Elsevier, vol. 58(3), pages 275-294, August.
    4. Chib, Siddhartha, 1996. "Calculating posterior distributions and modal estimates in Markov mixture models," Journal of Econometrics, Elsevier, vol. 75(1), pages 79-97, November.
    5. Holloway, Garth & Shankar, Bhavani & Rahman, Sanzidur, 2002. "Bayesian spatial probit estimation: a primer and an application to HYV rice adoption," Agricultural Economics, Blackwell, vol. 27(3), pages 383-402, November.
    6. Garth John Holloway & Simeon K. Ehui, 2001. "Demand, Supply and Willingness-to-Pay for Extension Services in an Emerging-Market Setting," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(3), pages 764-768.
    7. Stiglitz, Joseph E, 1989. "Markets, Market Failures, and Development," American Economic Review, American Economic Association, vol. 79(2), pages 197-203, May.
    8. Feder, Gershon & Just, Richard E & Zilberman, David, 1985. "Adoption of Agricultural Innovations in Developing Countries: A Survey," Economic Development and Cultural Change, University of Chicago Press, vol. 33(2), pages 255-298, January.
    9. Chib, Siddhartha, 1992. "Bayes inference in the Tobit censored regression model," Journal of Econometrics, Elsevier, vol. 51(1-2), pages 79-99.
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    Cited by:

    1. 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.
    2. 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.
    3. Luís Silveira Santos & Isabel Proença, 2017. "The Inversion of the Spatial Lag Operator in Binary Choice Models: Fast Computation and a Closed Formula Approximation," Working Papers REM 2017/11, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.
    4. 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.
    5. Wollni, Meike & Andersson, Camilla I.M., 2013. "Spatial patterns of organic agriculture adoption: evidence from Honduras," Discussion Papers 146715, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
    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. Fadare, Olusegun Ayodeji & Akerele, Dare & Toritseju, Begho, 3. "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).
    8. 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.
    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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