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Price and tax policy for semi-subsistence agriculture in Ethiopia


  • Weaver, Robert D.
  • Shire, Saad Ali


In the case of semi-subsistence agriculture where wage employment is not available, the role played by prices and taxes in determining production and consumption decisions is not clearly established by economic theories of household choice. This study demonstrates that where choices in production, consumption, and leisure can be made independently, farmers will decide what to grow on the basis of their preferences for marketed goods. The paper also points out that the choice will be affected by the level and type of taxation imposed. The paper shows the impact of four taxes -- agricultural revenue, land, production and marketed goods consumption -- on crop production and tax revenues. This paper also reports on a model of production in Ethiopia. The results of this study give strong evidence of the role of producer and consumer prices in semi-subsistence agriculture. In addition, the results show the importance of production capacity, household and climatic factors in agricultural development.

Suggested Citation

  • Weaver, Robert D. & Shire, Saad Ali, 1988. "Price and tax policy for semi-subsistence agriculture in Ethiopia," Policy Research Working Paper Series 67, The World Bank.
  • Handle: RePEc:wbk:wbrwps:67

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    Cited by:

    1. Catherine A. Bonjean & Gérard Chambas, 1995. "Taxe foncière, taxe à l'exportation : l'expérience vietnamienne est-elle transposable en Afrique ?," Revue Tiers Monde, Programme National Persée, vol. 36(144), pages 725-745.
    2. Kidane, Asmerom & Abler, David G., 1994. "Production technologies in Ethiopian agriculture," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 10(2), April.


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