IDEAS home Printed from
   My bibliography  Save this paper

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

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Harold Alderman & Hans Hoogeveen & Mariacristina Rossi, 2009. "Preschool Nutrition and Subsequent Schooling Attainment: Longitudinal Evidence from Tanzania," Economic Development and Cultural Change, University of Chicago Press, vol. 57(2), pages 239-260, January.
    2. Hallegatte, Stephane & Hourcade, Jean-Charles & Dumas, Patrice, 2007. "Why economic dynamics matter in assessing climate change damages: Illustration on extreme events," Ecological Economics, Elsevier, vol. 62(2), pages 330-340, April.
    3. de Janvry, Alain & Finan, Frederico & Sadoulet, Elisabeth & Vakis, Renos, 2006. "Can conditional cash transfer programs serve as safety nets in keeping children at school and from working when exposed to shocks?," Journal of Development Economics, Elsevier, vol. 79(2), pages 349-373, April.
    4. Fafchamps, Marcel & Udry, Christopher & Czukas, Katherine, 1998. "Drought and saving in West Africa: are livestock a buffer stock?," Journal of Development Economics, Elsevier, vol. 55(2), pages 273-305, April.
    5. Sharon Maccini & Dean Yang, 2009. "Under the Weather: Health, Schooling, and Economic Consequences of Early-Life Rainfall," American Economic Review, American Economic Association, vol. 99(3), pages 1006-1026, June.
    6. Hanan G. Jacoby & Emmanuel Skoufias, 1997. "Risk, Financial Markets, and Human Capital in a Developing Country," Review of Economic Studies, Oxford University Press, vol. 64(3), pages 311-335.
    7. Andrew Dillon & Valerie Mueller & Sheu Salau, 2011. "Migratory Responses to Agricultural Risk in Northern Nigeria," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 93(4), pages 1048-1061.
    8. Ferreira, Francisco H. G. & Schady, Norbert, 2008. "Aggregate economic shocks, child schooling and child health," Policy Research Working Paper Series 4701, The World Bank.
    9. Robert Jensen, 2000. "Agricultural Volatility and Investments in Children," American Economic Review, American Economic Association, vol. 90(2), pages 399-404, May.
    10. Eric Strobl & Marie-Anne Valfort, 2015. "The Effect of Weather-Induced Internal Migration on Local Labor Markets. Evidence from Uganda," World Bank Economic Review, World Bank Group, vol. 29(2), pages 385-412.
    11. Toya, Hideki & Skidmore, Mark, 2007. "Economic development and the impacts of natural disasters," Economics Letters, Elsevier, vol. 94(1), pages 20-25, January.
    12. Takashi Yamano & Harold Alderman & Luc Christiaensen, 2005. "Child Growth, Shocks, and Food Aid in Rural Ethiopia," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(2), pages 273-288.
    13. Foster, Andrew D, 1995. "Prices, Credit Markets and Child Growth in Low-Income Rural Areas," Economic Journal, Royal Economic Society, vol. 105(430), pages 551-570, May.
    14. Valerie Mueller & Daniel Osgood, 2009. "Long-term Impacts of Droughts on Labour Markets in Developing Countries: Evidence from Brazil," Journal of Development Studies, Taylor & Francis Journals, vol. 45(10), pages 1651-1662.
    15. Kazianga, Harounan & Udry, Christopher, 2006. "Consumption smoothing? Livestock, insurance and drought in rural Burkina Faso," Journal of Development Economics, Elsevier, vol. 79(2), pages 413-446, April.
    16. Hoddinott, John & Kinsey, Bill, 2001. " Child Growth in the Time of Drought," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 63(4), pages 409-436, September.
    17. Baez, Javier E. & de la Fuente, Alejandro & Santos, Indhira, 2010. "Do Natural Disasters Affect Human Capital? An Assessment Based on Existing Empirical Evidence," IZA Discussion Papers 5164, Institute for the Study of Labor (IZA).
    18. Zimmerman, Frederick J. & Carter, Michael R., 2003. "Asset smoothing, consumption smoothing and the reproduction of inequality under risk and subsistence constraints," Journal of Development Economics, Elsevier, vol. 71(2), pages 233-260, August.
    19. Stefan Dercon & Pramila Krishnan, 2000. "Vulnerability, seasonality and poverty in Ethiopia," Journal of Development Studies, Taylor & Francis Journals, vol. 36(6), pages 25-53.
    20. Stéphane Hallegatte & Fanny Henriet & Jan Corfee-Morlot, 2011. "The economics of climate change impacts and policy benefits at city scale: a conceptual framework," Climatic Change, Springer, vol. 104(1), pages 51-87, January.
    21. Beegle, Kathleen & Dehejia, Rajeev H. & Gatti, Roberta, 2006. "Child labor and agricultural shocks," Journal of Development Economics, Elsevier, vol. 81(1), pages 80-96, October.
    22. Edward Miguel & Shanker Satyanath & Ernest Sergenti, 2004. "Economic Shocks and Civil Conflict: An Instrumental Variables Approach," Journal of Political Economy, University of Chicago Press, vol. 112(4), pages 725-753, August.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    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.


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:67. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.