The effects of rising food prices on poverty in Mexico

We evaluate the impact of the rise in food prices during 2006–2008 on the poverty and extreme poverty rates in Mexico. We concentrate on the poor's consumption of staple foods, and analyze the change in their consumption brought about by changed prices. We also allow households receiving income from the farming and livestock sector to benefit from increases in prices of food products. We find a modest increase in poverty using 2006–2007 prices; however, there is a daunting effect on the poor once the 2008 prices are taken into account. After considering the positive effects of public policies announced in 2008, such as reduced taxes and tariffs on food products and greater subsidies to the extremely poor, the poverty rate measured through consumption increases from 25% to 33.5%, and the extreme poverty rate from 10.58% to 15.95%, given the increase in food prices. Further analysis using the theory of optimal taxes suggests policies oriented towards relieving the food price pressure on the Mexican poor should aim at lowering the prices of eggs, vegetable oil, milk, and chicken.     

Female Labour Supply and Intergenerational Preference Formation: Evidence for Mexico

Using a nationally representative sample for Mexico, we analyse the effect of a husband having a working mother on the probability that he has a working wife. Our results show that labour force participation by a husband's mother increases the probability of the labour force participation of his wife by 15 percentage points. The effect is mainly driven by males with less than high school education. One possible confounding factor is the effect of labour force participation of the wife's mother on the wife's labour participation decision. However, in a different sample, we do not find any effect of work force participation of wives' mothers on wives' decisions to join the labour force. Finally, we test the effect of work force participation by a husband's mother on the husband's preferences regarding child-rearing practices. We find that having a working mother strongly reduces the probability that daughters will be tasked to care for siblings and fosters preferences for a more egalitarian allocation of educational resources among children. Hence, promoting female labour force participation can have important dynamic implications, especially for developing countries.     

Measuring the impacts of agricultural research on poverty reduction

Policymakers are increasingly calling upon agricultural research managers to consider poverty reduction objectives when making resource allocations. The authors present a simple method to measure the impact of agricultural research on the poor. This method has the advantage that it presents the results in a manner consistent with commonly used measures of poverty. This consistency and focus should facilitate and enhance dialogue between policymakers and research managers when deciding on resource allocations and assessing impacts on poverty reduction. An illustrative application is presented using data from Malawi.     

Political dynasties and poverty: measurement and evidence of linkages in the Philippines

Political dynasty refers to a situation in which an incumbent official has at least one relative in elected office in the past or the present government. In the Philippines, for example, political dynasties comprise over 70% of its Congress. The impact of political dynasties on socioeconomic outcomes such as poverty is an important empirical question (do political dynasties exacerbate poverty?), and this paper presents some evidence. The analysis of data from the Philippines finds a worsening effect of political dynasties on poverty in provinces outside Luzon.     

It is where you are that matters: the spatial determinants of rural poverty in India

The spatial patterns of poverty in India are of considerable importance in themselves and for development theory and practice. This article examines the determinants of rural poverty in India using spatial econometric methods. It finds that while agricultural growth is the key determinant of rural poverty declines, there is significant spatial dependence in the growth rates of agricultural output. Irrigation is the primary driver of agricultural growth, and spatial variations in irrigation development seem to be associated with agro‐ecological conditions which may be vastly different within Indian states, parts of which may be similar to those prevailing in geographically contiguous states. Poverty reduction strategies need to be designed in the light of spatial factors and using spatial methods.     

The economic and poverty impacts of maize research in West and Central Africa

This article assembles the results of three multicountry surveys on variety performance and adoption patterns to measure the impacts of maize research in West and Central Africa from 1981 to 2005, and uses cost data since 1971 to compute social rates of return on public investments in maize research in the region. Adoption of modern varieties increased from less than 5% of the maize area in the 1970s to about 60% in 2005, yielding an aggregate rate of return on research and development (R&D) investment of 43%. The estimated number of people moved out of poverty through adoption of new maize varieties rose gradually in the 1980s to more than one million people per year since the mid 1990s. Over half of these impacts can be attributed to international maize research at IITA and CIMMYT. The article concludes with a discussion of strategic options to enhance the impacts of maize research in the region.     

Childhood obesity in Mexico: the effect of international migration

This article estimates the effect of international migration from Mexico to the United States on the obesity status of children who remain in Mexico. Theory suggests that increased liquidity as well as changing time allocations resulting from migration may influence obesity outcomes. Natural disasters are used as an identification strategy. Results suggest that older boys in urban areas are more likely to become obese when either a male or female migrates from the household, while girls in urban areas are less likely to become obese. Both changes in food expenditure patterns and time use changes after migration are likely pathways that affect childhood obesity. While there are some changes in food expenditures, we find more importantly that urban girls engage in more housework and screen time after migration, whereas urban teen boys do not substitute for adult work as much as girls. These changes in strenuous activities, particularly for girls, likely explain the differential effect that migration has on boys’ and girls’ obesity outcomes in Mexico.     

Introduction to the Special Feature: Evaluating the Impact of Agricultural Projects in Developing Countries

This article provides an introduction to the special feature on impact evaluation of agricultural projects in developing countries. The special feature is motivated by an increased interest in impact evaluation both within the economics profession and the development community. The article highlights methodological issues in conducting such evaluations and discusses the current literature that empirically assesses the effectiveness of agricultural projects. A synthesis of the articles presented in the special feature and their contribution to the literature are noted as well as conclusions on the next steps in evaluating agricultural projects in developing countries.     

Returns to public sector plant breeding in the presence of spill‐ins and private goods: the case of bean research in Michigan

This article illustrates a methodology for assessing economic returns to a publicly funded breeding program in the presence of private sector investments, and spill‐ins from other contemporary public institutions and past research efforts. The approach consists of determining yield gains from bean improvement research; applying these yield gain estimates to measure benefits attributable to different institutional players and time periods; and then assessing the benefit‐cost ratios of investments in a bean improvement program since 1980 by Michigan State University (MSU). The results indicate that investments in MSU's bean breeding program have yielded benefits to costs ratio in the range of 0.7 to 2.2, depending on the attribution rule used to estimate the benefits. The estimated benefit/cost ratios reported in this study are lower‐bound estimates, as they do not account for potential benefits from area planted to MSU varieties outside of Michigan (spillover effects), which was 1.5 times greater than the area planted to MSU‐bred varieties within Michigan in the period 1998–2002. The implications of the increasingly privatized bean seed markets for the role of public sector research in bean improvement research are discussed.     

Asset‐based poverty transition and persistence in rural China

This article tests empirically for transition and persistence of poverty in rural China based on the theory of asset‐based poverty traps. It proposes an analytical framework mitigating the problem of endogenous switching between accumulation regimes and disentangling the true state‐dependence of poverty. Specifically, a dynamic asset threshold separating households into downward and upward mobility regimes is identified after taking households’ unobserved characteristics and observed regime‐differentiated accumulation strategies into account. The static analysis identifies causality running from settling into a downward mobility regime to the probability of poverty measured by consumption. Furthermore, allowing for endogenous initial poverty status, the dynamic analysis finds strong true state‐dependence in poverty. Households with the same characteristics are nearly twice as likely to be poor as if they had not previously switched to the accumulation regime. Assets below the dynamic threshold serve as a conduit through which poverty propagates itself. Factors that help to break this vicious circle are identified.     

Poverty analysis using small area estimation: an application to conservation agriculture in Uganda

This article demonstrates the utility of small area estimation of poverty (SAEp) methods for researchers wishing to conduct a detailed welfare analysis as part of a larger survey of a small geographic area. This study applies SAEp methods as part of an impact assessment of a conservation agriculture production system in Eastern Uganda. Using SAEp, we estimate Foster–Greer–Thorbecke rural poverty indices, estimate the effects of per‐acre farm profit increases to poor households on the indices, and compare the findings to estimates of net returns from a field‐level evaluation of conservation agriculture for maize farmers. Results suggest that increasing the farm profits of the bottom 30% of households by $1.60 per‐acre per‐season would reduce rural poverty incidence by 1 percentage point. Available data on the net returns to conservation agriculture indicate that even these modest increases are achievable for few adopting households.     

Cocoa pricing options and their implications for poverty and industrialization in Ghana

This study establishes the cocoa pricing subsidization options that will stabilize processors’ throughput while meeting the multiple, but possibly conflicting, public policy objectives of maximizing government revenue and reducing poverty among Ghanaian cocoa beans producers. To evaluate these options, we construct and numerically simulate a structural dynamic stochastic model of a representative cocoa processor who maximizes the present value of current and expected future profits, given prevailing market conditions and cocoa pricing policies. Our results indicate that, given current processing capacity, the Ghana Cocoa Board would have to offer a 92% discount to processors on main‐crop beans in order to achieve the industrial goal of locally processing 40% of annual production. This would cause light‐crop beans used in processing to be completely displaced by main‐crop beans carried over as inventory. It would also increase mean processor revenues by 167%, but cause the Ghana Cocoa Board to operate at a significant deficit, implying that the stated goal could only be achieved through massive government subsidies.     

Pathways out of poverty in lagging regions: evidence from rural western China

How to reduce poverty in lagging regions remains much debated and underserved with solid empirical evidence. This study illustrates an empirical methodology to analyze the pathways households followed out of poverty and to explore their potential in the future using 2000–2004 rural household panel data from two lagging provinces of China, Inner Mongolia and Gansu. It finds that rising labor productivity in agriculture has been key in understanding poverty reduction in rural lagging areas of these provinces and that it still holds much promise. Circular migration has also been important in Gansu, though less so in Inner Mongolia. On average, rural diversification has not proven to contribute much to poverty reduction and income transfers and agricultural tax abolishment have only helped at the margin. The findings from these two case studies highlight that the scope for reducing poverty in rural lagging regions can still be substantial in agriculture, also when nonagriculture drives national growth.     

Assets,activities and income generation in rural Mexico: factoring in social and public capital⋆

In recent years, there has been increasing emphasis in the rural development literature on the multiple income‐generating activities undertaken by rural households and the importance of assets in determining the capacity to undertake these activities. Controlling for the endogeneity of activity choice and applying Lee's generalisation of Amemiya's two‐step estimator to a simultaneous equation model, household returns to assets from multiple activities are explored for the Mexico ejido sector. To incorporate the multiple variables representing social and public capital into the analysis, factor analysis is used. The results indicate that the asset position of the household has a significant effect on household participation in income‐generating activities and returns to those activities. Furthermore, the inclusion of measures of social and public capital into the analysis show that these assets play an important role in income‐generating activities and that the influence is dependent on the type of social and public capital as well as the particular activity.     

Estimating overall returns to international agricultural research in Africa through benefit-cost analysis: a "best-evidence" approach

This study offers a "best evidence" approach to summarizing recent benefit-cost analyses of international agricultural research in Africa. First, from an extensive literature review and the resulting global inventory of impact studies, 23 studies are identified that calculate aggregate rates of return for Consultative Group on International Agricultural Research (CGIAR) and partner investments in Sub-Saharan Africa (SSA). These studies are then appraised against a review framework consisting of principles, criteria, and indicators for study rigor. Subsequently, the economic benefits reported by studies grouped on the basis of its analytical rigor are aggregated and set against total investment by the CGIAR and national agricultural research systems to determine if the total investment to date can be justified by documented benefits under a range of assumptions. As a result, the study finds that aggregate investment is justified under a fairly wide range of suppositions. Under all scenarios, the vast majority of documented benefits stem from a relatively limited array of activities with a majority of benefits stemming from biological control (80%). Close to 20% of total benefits result from crop genetic improvement, and less than 1% result from all other activities. The implications of these results for research investment strategies in SSA and impact assessment are discussed.     

Productivity and Structural Heterogeneity in the Brazilian Manufacturing Sector: Trends and Determinants

Structural heterogeneity (SH)—i.e. the existence of marked asymmetries in labour productivity among firms, along with low-productivity firms forming a large share of total employment—plays an important role in development theory. But only recently has the availability of micro data made the rigorous measuring of SH possible. This paper makes compatible different databases on manufacturing production, innovation and micro-social data for Brazil—PIA, RAIS, Secex and PINTEC—for 2000–2008 in order to measure SH and analyse its determinants. First, productivity groups are formed out of the universe of Brazilian manufacturing firms using a k-mean cluster methodology. Second, the variables affecting the productivity group to which each firm belongs are tested using an ordered probit model. The results indicate that increasing returns (captured by the firm's market share, the number of employees in innovative activities, workers' years of schooling and the accumulation of workers' experience), the technological intensity of the industry, learning by exporting and public support to R&D have driven productivity growth and reproduced SH through time, as predicted by development and evolutionary theories.     

Ex post impacts of improved maize varieties on poverty in rural Ethiopia

Public agricultural research has been conducted in Africa for decades. While many studies have examined its aggregate impacts, few have investigated how it affects the poor. This paper helps fill this gap by applying a new procedure to explore the ex post impacts of improved maize varieties on poverty in rural Ethiopia. Plot‐level yield and cost changes due to adoption are first estimated using instrumental variable and marginal treatment effect techniques where possible heterogeneity is carefully accounted for. A backward derivation procedure is then developed to link treatment effect estimates with an economic surplus model to identify the counterfactual household income that would have existed without improved maize varieties. Poverty impacts are finally estimated by exploiting the differences between observed and counterfactual income distributions. Improved maize varieties have led to a 0.8–1.3 percentage drop of poverty headcount ratio and relative reductions of poverty depth and severity. However, poor producers benefit the least from adoption due to the smallness of their land holdings.