Endogenous Switching Regression Research Articles

The productivity and income effects of adopting improved rice varieties by smallholder farmers in Indonesia

PurposeThis study identified the determinants of improved rice variety adoption and measured their impact on farm productivity and the income of smallholder farmers in Indonesia.Design/methodology/approachWe used a multistage sampling procedure and data from household surveys in four districts in the Banten region of Indonesia. An endogenous switching regression (ESR) model was used to estimate the impact of adoption, and the propensity score matching (PSM) non-parametric method tested the strength of the ESR findings.FindingsThe farm productivity of adoption increased by 11.45% and the income of smallholder farmers increased by 12.10% when compared to that of traditional methods.Research limitations/implicationsThe positive and significant effects of improved rice variety adoption indicated that research programs that develop improved rice varieties can optimize the productivity and income of smallholder farmers.Originality/valueAdopting improved rice varieties increases the productivity and income of smallholder farmers, and the level of education, rice farming experience, access to extension workers, off-farm work, and mobile phone ownership have positive and significant effects on the adoption of improved rice varieties.

Does livestock-crop diversification improve food and nutrition security? Evidence from Eastern Ethiopia

ABSTRACT Pastoral and agro-pastoral households are the most vulnerable parts of the population to climate change-induced shocks and they are increasingly subject to acute food and nutrition insecurity. We identified drivers of livestock-crop diversification and examined its effects on improving households’ food and nutrition security using cross sectional data collected from 258 households across five districts in the East Hararghe zone in Ethiopia. Endogenous Switching Regression (ESR) analysis was used to identify factors associated with the households’ food and nutrition security outcomes and estimate the causal effects of livestock-crop diversification on the households’ food and nutrition security. Our results show that land certification, mobile phone ownership, and access to pastoral training centres were positively and significantly associated with livestock-crop diversification. In contrast, being located in Meyu Muluke and Kumbi districts were negatively and significantly associated with livestock-crop diversification, compared to Chinaksen district. The average treatment effect estimations suggest that livestock-crop diversification has positively and significantly improved diversified households’ nutritional security outcome. The findings also reveal that non-diversified households’ food insecurity would have reduced had they diversified. Nonetheless, livestock-crop diversification is neither enough to pull farm households fully out of food and nutrition insecurity nor the only factor influencing farm households’ food and nutrition security outcomes. Hence, there is also a need to strengthen access to physical infrastructure, credit facilities, extension services, provision of farm inputs, and pastoral training centres to reduce food and nutrition insecurity in the study area.

Carbon reduction potential of housing retrofits: Evidence from China

Carbon emissions have become a major contributor to global climate change, with the building sector representing one-third of the global energy demand, and the residential sector accounting for 70 % of final energy demand worldwide. The energy consumption for building cooling has grown rapidly in recent years. Housing retrofits have shown potential in improving building energy efficiency and thus aligning with objectives for energy-saving and carbon emissions reduction in the residential sector. Based on survey data from 28 provinces in China, this study estimates the impacts of housing retrofits on the building energy consumption for air conditioners, as well as impacts on the resulting carbon emissions. Employing Endogenous switching regression to mitigate self-selection bias and the consequent endogeneity problem, the analysis reveals that housing retrofits can reduce building energy consumption and consequent carbon emissions. Furthermore, factors including household characteristics, building attributes and geographic location can influence both residential energy consumption and carbon emissions. In addition, low-income households, families with children and those living in self-owned houses can benefit the most from housing retrofits. This study also offers recommendations to reducing household energy consumption and carbon emissions through improved renovation practices. These insights are instrumental for policymakers in identifying targeted policy objectives across diverse demographic groups. The findings hold relevance for other developing countries with large amounts of inefficient housing stock during rapid urbanization, and those prone to global warming, aiding their pursuit of Sustainable Development Goals.

Complementary technology adoption and smallholder commercialization: Panel data evidence from Ethiopia

AbstractAgricultural transformation involves the transition from subsistence agriculture marked by cultivating crops for auto‐consumption to cultivating crops for output markets. This transition from subsistence agriculture to market‐oriented agriculture can be a key policy boost to economic development, but evidence on the key entry points to increasing smallholder commercialization remains scarce. We examine the relationship between the adoption of improved maize varieties (IMVs), inorganic fertilizers, and smallholder commercialization. We model commercialization as a two‐step decision process involving market participation and the extent of participation (sales quantity) conditional on participation. Given these two related steps, we estimate a double‐hurdle model in both linear and non‐linear forms. Employing a three‐wave panel dataset from Ethiopia, we use the household fixed effects and correlated random effects model with the control function approach. We find the adoption of IMVs to be significantly associated with both market participation and the extent of participation. This relationship is also true for fertilizers, where we show a positive association between fertilizer use and commercialization. Given the seeming complementarity in the use of both IMVs and fertilizers, we further estimate their joint adoption. We use the multinomial endogenous switching regression model where we show greater commercialization gains under joint adoption. These findings are in line with a growing literature supporting the bundling of agricultural technologies. Given these insights, we provide empirical and policy support to the scaling of agricultural technologies as they have the potential to induce agricultural transformation by unlocking market opportunities.

Agricultural services and rural household welfare: empirical evidence from Ghana

PurposeThis paper aimed to examine the impacts of agricultural services on welfare of rural farmers in Ghana.Design/methodology/approachUsing data from 1431 rural maize farmers, we employ multinomial endogenous switching regression and multivalued inverse probability weighted regression adjustment to assess the impacts.FindingsResults show that 19.8%, 9.7% and 3.42% of farmers adopted solely irrigation, extension and mechanization, respectively. Furthermore, utilizing a range of agricultural services significantly improves maize yields, gross income and per capita food consumption.Research limitations/implicationsThis study recommends strategies that target the adoption of combinations of agricultural services to enhance rural farmers’ welfare in Ghana and other developing countries.Originality/valueWhile agricultural services are claimed to improve agricultural production and peasants’ welfare, their impacts are not studied exhaustively. This paper contributes by providing empirical evidence of the impacts of agricultural services on farmers’ welfare.Peer reviewThe peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-11-2022-0745.

Impact of Improved Maize and Bean Varieties on Household Income and Food Security in Uganda.

The National Agricultural Research Organisation (NARO) and development partners have invested substantial resources in breeding maize and bean varieties over the years. However, the impact of the varieties on productivity, household income and food security is not well documented. This paper evaluated the ex-post impact of adopting NARO released bean and maize varieties over the last five years on the productivity, household income and food security in Uganda. Data were collected from 30 districts in Uganda through a cross-sectional household survey of 1445 households, focus group discussions and key informant interviews. Using propensity score matching and endogenous switching regression models, the results showed that adoption of improved bean and maize varieties significantly increased crop productivity, household income and food security. This evidence suggests that there were tangible benefits from funding the development of bean and maize varieties in Uganda. The results indicate that although adoption of the improved bean and maize varieties increased productivity, it was still far below the research production output. This suggests that in addition to developing and disseminating the appropriate varieties, emphasis should be put on training farmers to use the complimentary inputs and practices to get the full benefit of the improved varieties.

Impact of India’s farm science centers (Krishi Vigyan Kendras) on farm households’ economic welfare: An evidence from a national farmers’ survey

This study examines the impact of access to India’s farm science centers (Krishi Vigyan Kendras, or KVKs) on agricultural households’ welfare using household data from the nationally representative Situation Assessment Survey of Agricultural Households conducted by India’s National Sample Survey Office in 2013. Employing different matching techniques and endogenous switching regression models, it was observed that the KVKs have a positive and statistically significant impact on agricultural households’ economic welfare, although, that impact is heterogeneous. Further, the investments made in expansion of India’s network of KVKs have been quite remunerative, as the benefit- to-cost ratio of expenditure on KVKs ranges from 8–12. Moreover, present findings suggest that expanding rural formal credit markets and promoting literacy can maximize the potential impact of KVKs on agricultural households’ economic welfare.

Impact of Climate Change Adaptation Strategies on Food Security of Farm Households in Rural Dire Dawa Administration, Ethiopia

Background: The impact of climate change on smallholder farmers in underdeveloped countries—specifically, Ethiopia is widely recognized. Farm households employ a range of geographically and temporally varying adaptation strategies to cope with the adverse consequences of climate change. Therefore, it is critical to examine the few empirical studies that examine how rural Ethiopian farm households confronting drought have responded to climate change to ensure food security. Primary data were collected from 385 randomly selected farm households using a semi-structured survey form. Data analysis was performed using endogenous switching regression models and descriptive statistics. Result: Results show that the majority of the sample households (76.7%) adopted climate change adaptation strategies (livelihood diversification, soil and water conservation, and chemical fertilizers separately or in combination) while the remaining 23.3% are non-adopters. Climate change knowledge is validated as an instrumental variable. Model results revealed that adopter farmers would have significantly lower (11.6%) daily calorie intake if they had not adopted them, and non-adopter farmers would have gained significantly higher (12.8%) daily calorie intake if they had adopted them. Sex, marital status, land fragmentation, education, family size, farm size, credit access, extension contacts, and livestock ownership are significantly associated with the likelihood of adoption. Results also show systematic differences where the sex of the head variable is inversely related to the food security of adopters and vice versa for non-adopters. Conclusion: The majority of farm households in the study area know the implications of climate change (73.5%) and suffer from food insecurity (59%). Farmers' knowledge about climate change and variability varies, affecting social, economic, biophysical, and institutional issues. This was shown using descriptive statistics and OLM data. Farm households led by young, male farmers who are married, frequently interact with extension agents, have access to loans and information about climate change, and have non-fragmented plots possess greater knowledge about climate change than other households. Adaptation interventions should consider the above factors and heterogeneities to increase adoption and improve the food security of farm households in the study area.

Determinants of school dropouts and the impact on youth unemployment: Evidence from Ethiopia

Despite significant youth school dropouts in Ethiopia, the household characteristics that contribute to dropouts and the impact of dropouts on youth unemployment remain unclear. To fill this gap, this study analyzes the factors that influence youth dropouts and evaluates the impact of dropouts on youth unemployment in Ethiopia using data from the 2019 World Bank Living Standards Measurement Study-Integrated Surveys on Agriculture. We employ endogenous switching regression to estimate the impact of youth dropouts on the likelihood that a household has unemployed youths and the number of unemployed youths in the household. The findings reveal that different parental characteristics such as age, education, and whether parents live together are negatively associated with the probability of youth dropouts, while households with a Muslim head are more likely to have school dropouts than Orthodox-headed households. Households who have multiple income sources, are located in rural areas, are located far from the school, and have disabled family members are also found to be more likely to have youth dropouts. In addition, our findings reveal that youth dropouts increase the probability of having unemployed youths in the household and raise the number of unemployed youths in the household. The study’s findings highlight the need for considering households’ characteristics and other factors associated with youth dropouts when developing educational interventions to reduce youth dropouts in Ethiopia. Furthermore, investment in parental education and infrastructural facilities such as roads and schools could reduce youth unemployment in Ethiopia, particularly in rural areas where public schools are the only option.

Socio‑Economic Drivers of Food Security Among Rural Households: Evidence From Smallholder Rice Farmers in Ebonyi State, Nigeria

Nigeria has been facing a food crisis problem, with most of the poor population having limited access to adequate quantity and quality food. Food security reflects the stability of food supply, availability of, and access to food, and affects the amount of food consumed with implications on the population’s health. Thus, this study examined the socio-economic drivers of food security among smallholder rice farmers in Ebonyi State, Nigeria. Primary data was collected under the Feed the Future Innovation Lab for Fish (Integrated rice-fish farming system) funded by USAID through a three-stage sampling technique. Foster–Greer–Thorbecke (FGT) and the Endogenous Switching Regression model were applied in the data analysis. The mean per capita household food expenditure is estimated at N 1,026.43; the food security measure shows that 46.67% of the households experience the incidence of food insecurity, 24.6% point is the food insecurity depth, and 17.2 % point is the severity of food insecurity. The ESR model shows that the drivers of food security are access to credit, marital status, farming experience, primary occupation, education, and farm size. The study proposed implementing more programmes that focus on poverty alleviation, which should be gender inclusive with credit support.

Multiple large shareholders, earnings management, and operating risk: Empirical evidence from China

This study uses the annual financial data of Chinese A-share listed firms from 2010 to 2020 to investigate the relationship between multiple large shareholders (MLS) and earnings management (EM). After analyzing the samples using the Ordinary Least Squares (OLS) model and endogenous switching regression (ESR) model, the empirical results show that the presence of MLS can increase corporate EM activities and the MLS have a significantly positive effect on EM in both the treatment and control groups. In addition, this conclusion still holds after conducting multiple robustness tests. The cross-section analysis shows that the external audit supervision quality, institutional shareholders, and the uncertainty of the external economic environment have significant impacts on the baseline model results. Lastly, mediation effect analysis shows that the presence of MLS increases the corporate operating risk through EM activities. The conclusions of this paper are critical for policymakers to supervise China’s capital market, improve the level of corporate governance of China’s listed firms, and further promote reform of ownership structure.

Sustainable practices in cocoa production. The role of certification schemes and farmer cooperatives

In Côte d'Ivoire and Ghana, many small-scale cocoa producers cultivate cocoa in unshaded or low-shaded plots, leading to challenges such as reduced biodiversity, soil fertility depletion, and increased soil erosion. To assess the adoption of sustainable agricultural practices in the cocoa sector, we develop a scale that incorporates dimensions of agroforestry, soil conservation, pest and disease management and farm sanitation. Using data from >1700 cocoa producers, we examine farmer participation in cooperatives and three main certification schemes (incl. Fairtrade, Rainforest Alliance and Organic) to understand their roles in promoting sustainable practices. We apply a multinomial endogenous switching regression model to control for potential selection bias and estimate the impact of participating in certification schemes, farmer cooperatives or both. In Côte d'Ivoire, econometric results show that joint participation in both a certification scheme and a farmer cooperative is associated with a significantly higher sustainability score. In Ghana, certification scheme membership shows the highest effect.

Can Cooperatives Enhance the Income-Generating Effect of Eco-Industries for Farmers?—Empirical Evidence from the Crested Ibis National Nature Reserve, China

Promoting the development of eco-industries plays a significant role in achieving the harmonious symbiosis between economic growth and environmental protection as well as enhancing the comprehensive effectiveness of ecological and economic benefits. Due to their unique nature, cooperatives may play a crucial role in facilitating the integration between farmers and the development of eco-industries. To investigate whether cooperatives possess the capacity to enhance the income-generating effects for farmers involved in eco-industries, this study selected the Crested Ibis National Nature Reserve (CINNR), a representative area for eco-industry development, as the research site. Data were gathered through face-to-face interviews, and this research empirically analyzed the impact of cooperatives on the income-generating effect of farmers using endogenous switching regression (ESR). The findings are threefold. First, cooperatives indeed enhance the income-generating effects for farmers engaged in eco-industries. Second, variables such as the distribution of agroforestry materials, premium capacity, soil quality, and status of village cadres have a positive impact on farmers joining cooperatives, whereas punishment initiatives discourage their participation. Third, for farmers who have joined cooperatives, factors such as the distribution of agroforestry materials, premium capacity, low-cost conservation initiatives, land area, status of village cadres, the proportion of labor force, technical training, soil quality, and land area positively affect their income from eco-industries. Conversely, punishment initiatives, age, and land location negatively impact their income. The results of this study provide new ideas for farmers to participate in the development of eco-industries, new evidence showing co-operatives can improve farmers’ income, and new directions for coordinating conflicts between conservation and development in protected areas.

Being a happy farmer: Technology adoption and subjective well-being

This paper empirically investigates the impact of technology adoption on farmers’ subjective well-being, as measured by happiness and life satisfaction. A theoretical framework is constructed to link farmers’ subjective well-being to technology adoption, with a particular emphasis on mechanization services in agricultural production. By fitting a nationally representative panel dataset – China Family Panel Studies – into an endogenous switching regression model that addresses potential selection bias, we find that technology adoption leads to a 0.194 standard deviation increase in happiness and a 0.065 standard deviation increase in life satisfaction. Further analysis reveals that the effect is more pronounced for individuals engaged in off-farm employment and varies across farm sizes. To underpin the causal effect, we test three plausible mechanisms – absolute income, relative income, and leisure – which are well-documented in the literature for their correlations with happiness and life satisfaction. Our empirical analysis indicates that the adoption of agricultural mechanization services indeed increases the absolute income of farmers and allows them to allocate more time to leisure activities.

Government fertilizer subsidies, input use, and income: The case of Senegal

Most Sub-Saharan countries implement input subsidy programs (ISPs) in an attempt to increase fertilizer use, crop yields and farmers’ income and to improve household food security. Senegal is no exception and has had an ISP in place for the last 15 years. This article assesses how access to subsidized fertilizer under the ISP is associated with changes in fertilizer and manure use and gross margin. Using household-level data from two agroecological zones, we employ an endogenous switching regression framework to control for the potential endogeneity of access to subsidized fertilizer. We find that access to subsidized fertilizer is associated with an increase in the total use of fertilizer of +39 % but also with a reduction in the use of commercial fertilizer of 18 %. Access to subsidized fertilizer is also associated with a reduction in the likelihood of using manure of 5 % and an increase in farmers’ total gross margin of 11 %. Results are heterogeneous across agroecological zones, with a strong crowding-out of commercial fertilizer where widely available to farmers. In this case, revising the design of the ISP could lead to improved efficiency.

Does Ecological Planting–Breeding Mix Pattern Improve Farmers’ Subjective Well-Being? Evidence from the Middle and Lower Reaches of the Yangtze River

The Chinese government is making vigorous efforts to control agricultural pollution. The promotion of an ecological planting–breeding mix pattern is one of them. Farmers’ mode of production will affect their subjective well-being. Thus, this paper aims to analyze the impact of adopting the ecological planting–breeding mix pattern on farmers’ subjective well-being based on 895 pieces of survey data from the provinces of Hubei, Hunan, and Jiangxi in the middle and lower reaches of the Yangtze River. Using the endogenous switching regression model, we find that the adoption of the ecological planting–breeding mix pattern has a significant positive effect on farmers’ subjective well-being. Based on this counterfactual hypothesis, if the farmers who actually adopted the ecological planting–breeding mix pattern did not adopt it, their subjective well-being would decrease from 4.006 to 3.669. Further examination indicates that self-worth identification, income increase, and neighborhood communication could be potential mechanisms. Additionally, the effect of the ecological planting–breeding mix pattern on subjective well-being is stronger in the group with low financial support. The technical support provided by the government does not have a significant regulatory effect on the adoption of the ecological planting–breeding mix pattern on subjective well-being. Our results suggest that farmers’ ecological production behavior can affect their subjective well-being. This may be relevant to many developing countries today that are attempting to adopt ecological agriculture patterns.

Adoption Analysis of BADC Produced <i>Boro</i> Rice Seed and Its Impact on Farm Household Food Security in Bangladesh

The purpose of this study is to look into the factors that influence adoption of BADC produce <i>Boro</i> rice seed and its impact on farm household food security in Bangladesh. The endogenous switching regression model (ESRM) and the propensity score matching (PSM) method were employed to identify the factors that influence adoption of BADC <i>Boro</i> rice seed and assessed its adoption impact on farm household food security. The analysis revealed that age, farm size, rice area, farm income, extension service, livestock ownership and government assistance had significant influence on adoption of BADC <i>Boro</i> rice seed. The estimated results show that education, farm size, earning members, farm income had positive and significant influence in attaining food security status of both adopters and non-adopters farm household. The estimated coefficient of correlation between the adoption equation and the food security equation of adopters was positive and significant. The study confirms that BADC produce <i>Boro</i> rice seed adoption had positive and significant impact on farm household food security of Bangladesh. The study recommended that BADC should implement appropriate policies to increase <i>Boro</i> rice seed production and enhance its adoption level through extension service so that food security situation improve in Bangladesh.

Assessing the inhibitory effect and intervention mechanism of food traceability system on reducing hog farmers’ overuse of animal antibiotics in China

The use of animal antibiotics is a double-edged sword. It can be used for disease treatment, health protection, and growth promoters. It also creates antibiotic residues and resistance, poses risks, and damages food safety, ecosystems, and public health. Under the pressure of disease risk and expected losses, farmers' overuse of animal antibiotics exacerbates this dual objective incompatibility. In this study, we employ the endogenous switching regression (ESR) model and the mediating effect method to empirically analyze the inhibitory effect and intervention mechanism of the food traceability system (FTS) on reducing farmers’ overuse of antibiotics by using the survey data of hog farmers from China. This paper measures the “dose” unit of antibiotics farmers use regarding cost and the active ingredients of antibiotics per kilogram of treated infected hogs. The study finds evidence that the FTS exerts a significant inhibitory effect on the overuse of antibiotics by farmers. The counterfactual hypothesis unveils that non-participation in the FTS by the involved farmers will increase the cost of antibiotics overuse by 0.080 yuan/kg, while if the farmers currently not participating are to engage with the FTS, the price will decrease by 0.126 yuan/kg. This effect persists across control variables controlled in turn and the unit doses of active ingredients of tetracycline, sulfonamides, β-lactam, chloramphenicol, and macrolide antibiotics. Moreover, our results reveal thatthe inhibitory effects of the FTS on over-the-counter and broad-spectrum antibiotics are more significant than on prescription and narrow-spectrum antibiotics. The results show that the inhibition effect of the FTS on the overuse of antibiotics by free-range, professional, and large-scale farmers exhibits an approximately inverse-U curvilinear relationship. Besides, the intervention mechanism of the FTS on the overuse of antibiotics by farmers mainly consists of social reputation maintenance, liability traceability for antibiotic residues, and biosafety enhancement, and the proportion of their mediating effects in the total impact are 24.22%, 21.84%, and 10.87%, respectively. Our empirical study has yielded several implications, such as strengthening the FTS construction, improving farmers’ antibiotic use skills, promoting standardized breeding levels, and increasing the market premium for food products that adhere to antibiotic residue standards. These outcomes not only contribute to the improvement of livestock production safety but also reduce the problem of antibiotic overuse.

Impact of urban productive safety net programme on poverty reduction and food security: Evidence from major cities of Eastern Ethiopia (Dire Dawa, Harar and Jigjiga)

AbstractDifferent social protection programs are designed in low‐income countries to eradicate poverty and improve the food security of poor people. Currently, the Urban Productive Safety Net Program (UPSNP) is designed to support those who are living in poverty and face food insecurity with predictable and reliable support through food, cash, or vouchers. However, limited empirical evidence has been presented about the significant impact of the program on the well‐being of households who participated in the program and the factors that affect the households' decision to participate in the program. Hence, this study aims to evaluate the impact of participation in UPSNP on well‐being using household survey data gathered from three main cities of Ethiopia: Dire Dawa, Harar, and Jigjiga in 2022. This study employed both propensity score matching (PSM) and endogenous switching regression (ESR) models to assess the impact of the UPSNP. The result shows that the probability of a household's participation decision is determined by the age of the household head, number of children, savings, house ownership, employment status of the household head, and shock. Furthermore, we found a consistently positive impact across models, indicating that participation in UPSNP reduces poverty and increases food security of households.

Self-generation and outage losses: A firm-level analysis for emerging and developing Asian countries

Access to reliable and affordable electricity is critical to economic development in emerging and developing Asia. However, many firms in these regions face challenges in obtaining consistent and affordable electricity from the grid, leading them to invest in self-generation technologies. This paper examines the strategic decision of firms to self-generate electricity and the economic losses incurred during power outages. Using survey data from the World Bank Enterprise Survey (WBES) of 5639 manufacturing firms in seven Asian countries, we identify factors driving the decision to self-generate and assess the impact of self-generation on mitigating economic losses during power outages. An endogenous switching regression model is employed to account for self-selection bias. The results show that firms experiencing more outages and higher electricity costs are more likely to invest in self-generation. Larger, older, and exporting firms also show a higher propensity to self-generate. In addition, the results indicate that firms that invested in self-generation would have experienced, on average, outage losses that were 88 percent higher than their actual losses if they had not invested. Conversely, firms without self-generation could have reduced their actual outage losses by on average 5 percent by implementing self-generation strategies. Overall, our results indicate that self-generating firms in Asian emerging and developing countries are particularly vulnerable to losses from power outages and underscore the importance of self-generation as a strategic choice for these firms.