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

Author

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  • Chirwa, Themba G.

Abstract

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.

Suggested Citation

  • Chirwa, Themba G., 2010. "Program evaluation of agricultural input subsidies in Malawi using treatment effects: Methods and practicability based on propensity scores," MPRA Paper 20878, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:20878
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    File URL: https://mpra.ub.uni-muenchen.de/21236/1/MPRA_paper_21236.pdf
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    References listed on IDEAS

    as
    1. 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 482-488, May.
    2. Bronwyn Hall & Alessandro Maffioli, 2008. "Evaluating the impact of technology development funds in emerging economies: evidence from Latin America," The European Journal of Development Research, Taylor and Francis Journals, vol. 20(2), pages 172-198.
    3. 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.
    4. Marc F. Bellemare & Christopher B. Barrett, 2006. "An Ordered Tobit Model of Market Participation: Evidence from Kenya and Ethiopia," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(2), pages 324-337.
    5. Cameron,A. Colin & Trivedi,Pravin K., 2005. "Microeconometrics," Cambridge Books, Cambridge University Press, number 9780521848053, October.
    6. Minot, Nicholas & Benson, Todd, 2009. "Fertilizer subsidies in Africa: Are vouchers the answer?," Issue briefs 60, International Food Policy Research Institute (IFPRI).
    7. 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.
    8. 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.
    9. 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.
    10. repec:ags:stataj:116022 is not listed on IDEAS
    11. Becker, Sascha O. & Ichino, Andrea, 2002. "Estimation of average treatment effects based on propensity scores," Stata Journal, StataCorp LP, vol. 0(Number 4), pages 1-20.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. repec:eee:jfpoli:v:75:y:2018:i:c:p:1-14 is not listed on IDEAS
    2. Keita, Moussa, 2012. "Impact of subsidized inputs credits on land allocation and market-oriented agriculture in rural households in Mali," MPRA Paper 57542, University Library of Munich, Germany.
    3. Holden, Stein & Mangisoni, Julius, 2013. "Input subsidies and improved maize varieties in Malawi: -What can we learn from the impacts in a drought year?," CLTS Working Papers 7/13, Norwegian University of Life Sciences, Centre for Land Tenure Studies.
    4. Lunduka, Rodney & Ricker-Gilbert, Jacob & Shively, Gerald & Jayne, Thom, 2014. "Redefining the goals and objectives of the Farm Input Subsidy Program (FISP) in Malawi," Food Security Collaborative Policy Briefs 234945, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    5. Mason, Nicole M. & Tembo, Solomon T., 2014. "Do input subsidies reduce poverty among smallholder farm households? Evidence from Zambia," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170617, Agricultural and Applied Economics Association.
    6. Mason, Nicole M. & Wineman, Ayala & Kirimi, Lilian & Mather, David, 2017. "The Effects Of Kenya’S ‘Smarter’ Input Subsidy Program On Smallholder Behavior And Incomes: Do Different Quasi-Experimental Approaches Lead To The Same Conclusions?," Feed the Future Innovation Lab for Food Security Policy Research Papers 259532, Michigan State University, Department of Agricultural, Food, and Resource Economics, Feed the Future Innovation Lab for Food Security (FSP).
    7. Mason, Nicole M. & Wineman, Ayala & Kirimi, Lilian & Mather, David, 2016. "The Effects of Kenya’s ‘Smarter’ Input Subsidy Program on Smallholder Behavior and Incomes: Do Different Quasi-Experimental Approaches Lead to the Same Conclusions?," Food Security Collaborative Working Papers 232090, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    8. Musa Salihu Ewugi & Mohd Zaini Abd Karim & Roslan Abdul-Hakim, 2016. "Shiroro Hydro Electricity Dam and Happiness of Host Community: An Evaluation Using Propensity Score Matching Analysis," International Journal of Economics and Financial Issues, Econjournals, vol. 6(3), pages 1106-1113.
    9. repec:bla:jageco:v:68:y:2017:i:1:p:45-69 is not listed on IDEAS
    10. Mason, Nicole M. & Tembo, Solomon T., 2015. "Do Input Subsidy Programs Raise Incomes and Reduce Poverty among Smallholder Farm Households? Evidence from Zambia," Food Security Collaborative Working Papers 198702, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    11. Nielsen, Thea & Schunemann, Franziska & McNulty, Emily & Zeller, Manfred & Nkonya, Ephraim M. & Kato, Edward & Meyer, Stefan & Anderson, Weston & Zhu, Tingju & Queface, Antonio & Mapemba, Lawrence, 2015. "The food-energy-water security nexus: Definitions, policies, and methods in an application to Malawi and Mozambique:," IFPRI discussion papers 1480, International Food Policy Research Institute (IFPRI).

    More about this item

    Keywords

    Fertilizer Subsidies; Propensity Scores; Logit; Nearest Neighbor; Stratification; Kernel; Radius; Complex Survey Design; Average Treatment Effects on the Treated;

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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