The impact of uncertainty in a class of objective functions

This note analyzes some properties of a class of models involving optimization under uncertainty. Such models are characterized by a specific form of the objective function which is frequently encountered by economists. The discussion presented below generalizes a method which has been applied by several theoreticians [1–4, 8] to the analysis of specific topics in the theory of the firm and the problem of investment under uncertainty. This method makes use of a specific parameterization of risk and imposes some restrictions on decision makers' behavior, thus implying a model not as general as the one presented by Rothschild and Stiglitz [6, 7]. However, the present model is still plausible and affords some definite results where more general models are ambiguous.     

Agricultural Extension: Good Intentions and Hard Realities

What considerations lead policymakers to invest in agriculturalextension as a key public responsibility, and what factors andagency incentives explain differences in extension system performance?To help answer these questions, this article provides a frameworkoutlining farmers' demand for information, the public goodscharacter of extension services, and the organizational andpolitical attributes affecting the performance of extensionsystems. This conceptual framework is used to analyze severalextension modalities and their likely and actual effectiveness.The analysis highlights the efficiency gains that can come fromlocally decentralized delivery systems with incentive structuresbased on largely private provision, although in most poorercountries extension services will remain publicly funded.      

Land Tenure and Property Rights: Theory and Implications for Development Policy

This article explores the nature of property rights systems,their evolution, and their effect on resource allocation. Itis argued that certain institutional arrangements for land rightshave evolved in order to reduce uncertainty and increase efficiencyin credit as well as in land markets. Of particular relevanceto developing countries, the article emphasizes the contributionof public sector infrastructure to effective land rights systems.An appendix to the article presents a formal model analyzingthe effects of security of land rights on land prices, the intensityof cultivation, and the use of credit. Empirical evidence fromThailand supports several of the propositions derived from themodel.     

Cost-Effectiveness of Alternative Integrated Pest Management Extension Methods: An Example from Bangladesh

This study examines the cost-effectiveness of alternative methods for diffusing integrated pest management practices in Bangladesh. Methods compared include farmer field schools, field days, and extension agent visits. Farmer field school participants were more likely to adopt integrated pest management practices than recipients of messages from field days and agent visits. However, due to lower costs per participant, field days were the most cost-effective means for stimulating adoption of simpler practices and extension agent visits were the most cost-effective for extending more complex practices.     

Sending Farmers Back to School: The Impact of Farmer Field Schools in Indonesia

This paper evaluates the impact of farmer field schools, an intensive participatory training program emphasizing integrated pest management. The evaluation focuses on whether program participation has improved yields and reduced pesticide use among graduates and their neighbors who may have gained knowledge from graduates through informal communications. The study utilizes panel data covering 1991–99 in Indonesia. The analysis, employing a modified "difference-in-differences" model, indicates that the program did not have significant impacts on the performance of graduates and their neighbors. Several plausible explanations for this outcome are discussed, and recommendations for improvements are suggested.     

Time Series Analysis of Repeated Surveys: The State–space Approach

Cross sectional estimates from repeated surveys form a time series { y_t }. These estimates can be viewed as the sum y _t = Y _t + e _t of two processes, { Y _t }, the population process and { e _t }, the survey error process. Serial correlations in the latter series are usually present, mainly due to sample overlap. Other sources of data such as censuses, administrative records and demographic population counts are also available. The state–space modelling approach to the analysis of repeated surveys allows combining information from different sources, incorporating benchmarking constraints in a natural way. Results from these methods seem to compare favourably with those from X-11-ARIMA in filtering out survey errors.     

The Impact of Landownership Security: Theory and Evidence from Thailand

This article develops a model of farmers' land acquisition andinvestment decisions. The model clarifies the relation betweenland values, landownership security, and credit markets. Therisk of eviction on untitled lands and the advantages in accessto credit associated with titled land are shown to account forthe higher price of titled land. Furthermore, observed landprices are distorted when credit is priced below the opportunitycost of capital and the risk of eviction is positive. Thereforesocial benefit analysis of land titling cannot utilize landprices without correcting for these distortions. The articleoffers formulas for performing such corrections. Econometricestimates of the value of legal ownership in three provincesof Thailand using cross-section land price data show a statisticallysignificant effect of ownership security on land price. Theeconometric estimates of ownership security are combined withthe formulas generated by the model to yield estimates of thesocial benefit of land titling in the three provinces. The analysisimplies that granting full legal ownership to squatters canbe a socially beneficial policy in many provinces.     

ANIMAL HEALTH SERVICES: FINDING THE BALANCE BETWEEN PUBLIC AND PRIVATE DELIVERY

Growing fiscal deficits and greater awareness of the huge economiccost of often-inefficient government activities have renewedinterest in transferring the delivery of important servicesfrom the public to the private sector in developing countries.This article, drawn from a longer study, offers a frameworkfor determining the appropriate roles of the public and privatesectors in delivering animal health services, such as veterinarysurveillance, disease vector control, vaccination, clinicaltreatment of sick animals, inspection of livestock products,and veterinary research and extension. The profitability and therefore the supply of private veterinaryservices is governed by several factors arising from economiesof scale, such as the size of the livestock enterprises in thelocality, the nature of potential or actual diseases, and thetypes of animals raised in the production systems. Thus, inareas where private veterinary work is unprofitable or whereother types of market failure occur, economic or social concernsmay make some type of public intervention necessary. The transferof animal health services from the public to the private sectormust be done selectively, and government support may be neededto ensure the success of such transfers.