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A Test of Separability of Consumption and Production Decisions of Farm Households in Ethiopia

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  • Christophe Muller

    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

Abstract

In this paper, we test and reject the separability of production and consumption decisions of agricultural households in Ethiopia, using data from a rural household survey conducted in 1994 and an estimated labour demand equation. We also elicit socio-demographic and asset variables that are positively linked with agricultural labour demands. These results reflect the limited development of fully organised labour markets in rural Ethiopia. They also imply that purely market-driven agricultural policies, e.g., price subsidies or taxes, may have only limited or perverse impacts, and should be complemented by policies directly affecting household decisions, such as food aid, technology transfer, free supply of fertilizers, etc.

Suggested Citation

  • Christophe Muller, 2014. "A Test of Separability of Consumption and Production Decisions of Farm Households in Ethiopia," Working Papers halshs-00993393, HAL.
    • Handle: RePEc:hal:wpaper:halshs-00993393
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00993393
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    References listed on IDEAS

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    1. Dercon, Stefan & Christiaensen, Luc, 2011. "Consumption risk, technology adoption and poverty traps: Evidence from Ethiopia," Journal of Development Economics, Elsevier, vol. 96(2), pages 159-173, November.
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    6. Mani, Subha & Hoddinott, John & Strauss, John, 2012. "Long-term impact of investments in early schooling — Empirical evidence from rural Ethiopia," Journal of Development Economics, Elsevier, vol. 99(2), pages 292-299.
    7. Pelletier, David L. & Deneke, Kassahun & Kidane, Yemane & Haile, Beyenne & Negussie, Fikre, 1995. "The food-first bias and nutrition policy: lessons from Ethiopia," Food Policy, Elsevier, vol. 20(4), pages 279-298, August.
    8. Vakis, Renos & Sadoulet, Elisabeth & de Janvry, Alain & Cafiero, Carlo, 2004. "Testing for Separability in Household Models with Heterogeneous Behavior: A Mixture Model Approach," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt4hs3g5dj, Department of Agricultural & Resource Economics, UC Berkeley.
    9. Benjamin, Dwayne, 1992. "Household Composition, Labor Markets, and Labor Demand: Testing for Separation in Agricultural Household Models," Econometrica, Econometric Society, vol. 60(2), pages 287-322, March.
    10. Vakis, Renos & Sadoulet, Elisabeth & de Janvry, Alain & Cafiero, Carlo, 2004. "Testing for Separability in Household Models with Heterogeneous Behavior: A Mixture Model Approach," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt4hs3g5dj, Department of Agricultural & Resource Economics, UC Berkeley.
    11. Michael Kevane, 1996. "Agrarian Structure and Agricultural Practice: Typology and Application to Western Sudan," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(1), pages 236-245.
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    Cited by:

    1. Christophe Muller & Nouréini Sayouti, 2019. "How Do Agro-Pastoral Policies Affect the Dietary Intake of Agro-Pastoralists? Evidence from Niger," AMSE Working Papers 1917, Aix-Marseille School of Economics, France, revised Apr 2020.
    2. repec:hal:cdiwps:halshs-02532955 is not listed on IDEAS
    3. Allen, James E., 2018. "Are agricultural markets more developed around cities? Testing for urban heterogeneity in separability in Tanzania," Food Policy, Elsevier, vol. 79(C), pages 199-212.
    4. Mayéko Léon, 2020. "Hunger and the Issue of Agricultural Productivity in Congo," Journal of Agricultural Studies, Macrothink Institute, vol. 8(2), pages 306-322, June.
    5. Touhami Abdelkhalek & Fouzia Ejjanoui, 2015. "Tests De Séparabilité dans les Decisioins des Menages Agricoles: Cas du Maroc," Working Papers 955, Economic Research Forum, revised Oct 2015.

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    More about this item

    Keywords

    agricultural household; separability; Ethiopia;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation

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