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Simulating Farm Household Poverty: From Passive Victims to Adaptive Agents

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  • Schreinemachers, Pepijn
  • Berger, Thomas

Abstract

Existing microeconomic models for simulating poverty heavily rely on static projection from statistical inference. When used for simulation these models tend to conceive farm households as passive victims and thereby underestimate their resilience and adaptive capacity. Farming systems research has much to contribute to the research on poverty by bringing in a detailed understanding of farm household decision-making, which directly relates to their adaptive capacity. This paper presents a novel methodology to simulate poverty dynamics using a farming systems approach. The methodology is based on mathematical programming of farm households but adds three innovations: First, poverty levels are quantified by including a three-step budgeting system, including a savings model, a Working-Leser model, and an Almost Ideal Demand System. Second, the model is extended with a disinvestment model to simulate farm household coping strategies to food insecurity. Third, multi-agent systems are used to tailor each mathematical program to a real-world household and so to capture the heterogeneity of opportunities and constraints at the farm level as well as to quantify the distributional effects of change. An empirical application to Uganda illustrates the methodology. The method opens exciting new prospects for applying farming systems research and multi-agent systems to poverty analysis and the ex ante assessment of alternative policy interventions.

Suggested Citation

  • Schreinemachers, Pepijn & Berger, Thomas, 2006. "Simulating Farm Household Poverty: From Passive Victims to Adaptive Agents," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25479, International Association of Agricultural Economists.
  • Handle: RePEc:ags:iaae06:25479
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    References listed on IDEAS

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    1. Datt, Gaurav & Jolliffe, Dean, 2005. "Poverty in Egypt: Modeling and Policy Simulations," Economic Development and Cultural Change, University of Chicago Press, vol. 53(2), pages 327-346, January.
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    12. Berger, Thomas, 2001. "Agent-based spatial models applied to agriculture: a simulation tool for technology diffusion, resource use changes and policy analysis," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 25(2-3), September.
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    Cited by:

    1. Schreinemachers, Pepijn & Berger, Thomas & Aune, Jens B., 2007. "Simulating soil fertility and poverty dynamics in Uganda: A bio-economic multi-agent systems approach," Ecological Economics, Elsevier, vol. 64(2), pages 387-401, December.

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    Keywords

    Food Security and Poverty;

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