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Agriculture and national welfare around the world: causality and international heterogeneity since 1960

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  • Bravo-Ortega, Claudio
  • Lederman, Daniel

Abstract

Calculations of marginal welfare effects suggest that agricultural development has had important positive effects on national welfare, especially in developing countries. Latin American and Caribbean countries have also benefited from agricultural growth, but non-agricultural production has had marginal welfare effects that are greater in magnitude than those provided by agricultural activities. In contrast, the industrialized, high-income countries experienced marginal welfare gains from non-agricultural activities that are much greater than those derived from agriculture, whose impact is actually negative. These calculations of marginal welfare effects across regions depend on econometric estimates of elasticities linking agricultural and nonagricultural economic activities to four elements in a national welfare function: national GDP per capita, average income of the poorest households within countries, environmental outcomes concerning air and water pollution and deforestation, and macroeconomic volatility. The econometric analyses are motivated by theoretical treatments of key issues. The empirical models are estimated with various econometric techniques that deal with issues of causality and international heterogeneity.

Suggested Citation

  • Bravo-Ortega, Claudio & Lederman, Daniel, 2005. "Agriculture and national welfare around the world: causality and international heterogeneity since 1960," Policy Research Working Paper Series 3499, The World Bank.
  • Handle: RePEc:wbk:wbrwps:3499
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    References listed on IDEAS

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    1. Klinger, Bailey & Lederman, Daniel, 2004. "Discovery and development : an empricial exploration of"new"products," Policy Research Working Paper Series 3450, The World Bank.
    2. Stern, David I., 2004. "The Rise and Fall of the Environmental Kuznets Curve," World Development, Elsevier, vol. 32(8), pages 1419-1439, August.
    3. Cole, Matthew A., 2003. "Development, trade, and the environment: how robust is the Environmental Kuznets Curve?," Environment and Development Economics, Cambridge University Press, vol. 8(04), pages 557-580, October.
    4. Larson, Donald & Mundlak, Yair, 1997. "On the Intersectoral Migration of Agricultural Labor," Economic Development and Cultural Change, University of Chicago Press, vol. 45(2), pages 295-319, January.
    5. Johnson, D Gale, 1997. "Agriculture and the Wealth of Nations," American Economic Review, American Economic Association, vol. 87(2), pages 1-12, May.
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    Citations

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    Cited by:

    1. Christiaensen, Luc & Demery, Lionel & Kuhl, Jesper, 2011. "The (evolving) role of agriculture in poverty reduction--An empirical perspective," Journal of Development Economics, Elsevier, vol. 96(2), pages 239-254, November.
    2. Selomane, Odirilwe & Reyers, Belinda & Biggs, Reinette & Tallis, Heather & Polasky, Stephen, 2015. "Towards integrated social–ecological sustainability indicators: Exploring the contribution and gaps in existing global data," Ecological Economics, Elsevier, vol. 118(C), pages 140-146.
    3. Dethier, Jean-Jacques & Effenberger, Alexandra, 2012. "Agriculture and development: A brief review of the literature," Economic Systems, Elsevier, vol. 36(2), pages 175-205.
    4. Christiaensen, Luc & Demery, Lionel & Kuhl, Jesper, 2006. "The role of agriculture in poverty reduction an empirical perspective," Policy Research Working Paper Series 4013, The World Bank.
    5. Mellor, John W. & Malik, Sohail J., 2017. "The Impact of Growth in Small Commercial Farm Productivity on Rural Poverty Reduction," World Development, Elsevier, vol. 91(C), pages 1-10.
    6. Timmer, Peter & Weisbrod, Julian & McCulloch, Neil, 2006. "The Pathways out of Poverty in Rural Indonesia: an empirical assessment," Proceedings of the German Development Economics Conference, Berlin 2006 29, Verein für Socialpolitik, Research Committee Development Economics.
    7. Lefèvre, Mélanie & Tharakan, Joe, 2011. "Intermediaries, transport costs and interlinked transactions," CEPR Discussion Papers 8615, C.E.P.R. Discussion Papers.
    8. Gonzalez Corzo, Mario, 2013. "Los efectos de las transformaciones agrícolas en los antiguos países socialistas: Algunas consideraciones para Cuba
      [The effects of agricultural transformations in former socialist countries: Some
      ," MPRA Paper 60458, University Library of Munich, Germany.

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