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Program evaluation of agricultural input subsidies in Malawi using treatment effects: Methods and practicability based on propensity scores

  • Chirwa, Themba G.

Several evaluations have been conducted to assess the impact of agricultural input subsidies in Malawi but have been mostly either descriptive or qualitatively inferred of the intervention impacts on the overall goal of the subsidy program. In most studies cited in this paper their approaches do not control for misspecification errors that might arise due to selection bias. One common erroneous approach is the lack of controlling for treatment effects. In this study we employ quasi-experimental econometric techniques using propensity scores to control for selection bias by creating control groups for those individuals that benefit from agricultural input subsidies. The study utilizes raw household data from two surveys conducted through the Malawi National Statistical Office in 2004/05 and 2006/07 production seasons. A household model for each dataset is estimated together with Average Treatment Effects on the Treated to assess the impact of targeted fertilizer input subsidies in 2004/05 and a refined program adopted in 2006/07 production periods. The evidence suggest that the starter pack or targeted input program implemented before 2004/05 focusing on one tenth of a hectare had a significant negative impact on household food expenditures compared to the refined program in 2006/07 that targeted about half a hectare for marginalized smallholder farmers. The latter, though portraying mostly insignificant results, showed positive impacts on household food expenditures. The approach adopted also proposes ways in which policy makers can effectively and independently evaluate the impact of public programs on social and economic welfare.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 20878.

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Date of creation: 22 Feb 2010
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Handle: RePEc:pra:mprapa:20878
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  1. Bronwyn H. Hall & Alessandro Maffioli, 2008. "Evaluating the Impact of Technology Development Funds in Emerging Economies: Evidence from Latin-America," IDB Publications (Working Papers) 24638, Inter-American Development Bank.
  2. Nigel Key & Elisabeth Sadoulet & Alain De Janvry, 2000. "Transactions Costs and Agricultural Household Supply Response," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(2), pages 245-259.
  3. Jayne, T. S. & Govereh, J. & Wanzala, M. & Demeke, M., 2003. "Fertilizer market development: a comparative analysis of Ethiopia, Kenya, and Zambia," Food Policy, Elsevier, vol. 28(4), pages 293-316, August.
  4. Dorward, Andrew & Chirwa, Ephraim & Kelly, Valerie A. & Jayne, Thomas S. & Slater, Rachel & Boughton, Duncan, 2008. "Evaluation Of The 2006/7 Agricultural Input Subsidy Programme, Malawi. Final Report," Food Security Collaborative Working Papers 97143, Michigan State University, Department of Agricultural, Food, and Resource Economics.
  5. Sascha O. Becker & Andrea Ichino, 2002. "Estimation of average treatment effects based on propensity scores," Stata Journal, StataCorp LP, vol. 2(4), pages 358-377, November.
  6. Bellemare, Marc F. & Barrett, Christopher B., 2005. "An Ordered Tobit Model of Market Participation: Evidence from Kenya and Ethiopia," Working Papers 14748, Cornell University, Department of Applied Economics and Management.
  7. Minot, Nicholas & Benson, Todd, 2009. "Fertilizer subsidies in Africa: Are vouchers the answer?," Issue briefs 60, International Food Policy Research Institute (IFPRI).
  8. Cameron,A. Colin & Trivedi,Pravin K., 2005. "Microeconometrics," Cambridge Books, Cambridge University Press, number 9780521848053.
  9. Ricker-Gilbert, Jacob & Jayne, Thomas S. & Black, J. Roy, 2009. "Does Subsidizing Fertilizer Increase Yields? Evidence from Malawi," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49532, Agricultural and Applied Economics Association.
  10. Esther Duflo & Michael Kremer & Jonathan Robinson, 2008. "How High Are Rates of Return to Fertilizer? Evidence from Field Experiments in Kenya," American Economic Review, American Economic Association, vol. 98(2), pages 482-88, May.
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