Endogenous Switching Regression Research Articles

Artisanal small-scale mining, farm labour attraction and household welfare in Ghana

The discourse on the impact of artisanal small-scale mining (ASM) has often concentrated on land degradation, and surface water pollution. How ASM is increasingly attracting farm labourers (FL) in mining communities is rarely discussed. Drawing insight from selected mining communities, which combines the perspectives and experiences of small-scale miners, farmers, academics, and policymakers, this article uses the endogenous switching regression model to identify the determinants of FL attraction to ASM as well as the drivers of labour welfare. The model estimated the impact of labour supply on consumption expenditure per adult equivalent. The results show that FL decision to shift to ASM sector is constructed around welfare incentives. For instance, FL who joined ASM increased their consumption expenditure per adult equivalent by 66.6 percent. The article established that ASM provides crucial livelihoods to rural households. Meanwhile, if proper incentives such as fertilizer subsidy and agriculture extension intensification are not put in place, the labour attraction by ASM will have detrimental effects on food security. Therefore, proper regulatory frameworks should be enforced by duty-bearers to regulate the activities of ASM as it provides welfare improvements to farmers. Lastly, further studies should investigate the decency of labour supply services to ASM.

Risk preferences, adoption and welfare impacts of multiple agroforestry practices

Despite growing literature on the impact of agroforestry practices on livelihoods and welfare, studies that account for the multiplicity of agroforestry practices, which may be governed by farmers' divergent risk and time preferences are lacking. This is especially the case for agro-silviculture and silvopasture agroforestry systems that entail significant fixed and management costs in which farmers' risk tolerance and patience may play a big role in adoption decisions. In this paper, we first explore the effect of farmers' risk and time preferences on the uptake of multiple agroforestry practices (MAPs). Then, we examine whether the multiplicity of agroforestry practices increases farmers' income using multinomial endogenous switching regression. We find farmers' risk and time preferences significantly govern the adoption of agroforestry practices, with risk-averse farmers and farmers with lower discount rates more likely to adopt MAPs. More importantly, the complementarity and importance of adopting MAPs is highlighted by the 29% increase in income of farmers who practice both agro-silviculture and silvopasture. This result highlights the more important role of integrated agroforestry that creates synergy for welfare improvement.

The impact of adoption of milk safety practices on food and nutrition security: Evidence from smallholder dairy farmers in Ethiopia

Despite the progress observed over the past decades, food and nutritional insecurity remain the prominent challenges in Ethiopia. In this respect, improved farming practices and productivity-enhancing agricultural technologies have been identified as pathways out of these problems; these technologies are the priority agenda of the government policy in Ethiopia. Nonetheless, the impact of the adoption of milk safety practices on dairy farmers’ food and nutrition security has not yet been addressed, especially at the smallholder farmers’ level. The aim of this study was to evaluate the impact of the adoption of milk safety practices on dairy farmers’ food and nutrition security in Ethiopia, using primary data collected from 410 dairy farmers. Generalized propensity score matching was used to evaluate the heterogeneous impact of the adoption of milk safety practices on the household food and nutrition security indicators (per capita food consumption expenditure and food consumption score). The findings reveal that the adoption of milk safety practices had a moderate impact on food consumption expenditure but had no significant impact on food consumption score. An ordered probit endogenous switching regression was also used to account for unobserved bias and check the robustness of the generalized propensity score estimates. Accordingly, the results are similar to the generalized propensity score estimates, and unobserved bias was not a problem. In general, the impact of adoption of milk safety practices on food and nutrition security of smallholder dairy farmers is moderate in Ethiopia. This might be because of the high compliance costs with the adoption of milk safety practices and the lack of quality-based pricing systems. Hence, creating an enabling environment, which in turn, encourages the adoption of milk safety practices would help improve positive effects of the adoption of milk safety practices on food and nutritional security.

Do Green Production Technologies Improve Household Income? Evidence from Rice Farmers in China

Revealing the behavioral decision-making mechanism and behavioral effects of farmers adopting green production technologies will help motivate farmers to actively adopt green production technologies, thereby promoting the development of green agriculture. A stratified random sampling technique was used to select 607 Chinese rice farmers, while the endogenous switching regression model was used to analyze the influencing factors and behavioral effects of farmers adopting green production technologies. The results show that the adoption of green production technologies by farmers can significantly increase household income. Among the green production technologies, soil testing and formula fertilization technology has the greatest impact on farmers’ income, followed by straw returning technology and planting green manure. The main influencing factors of farmers adopting green production technologies are education level, cultivated land area, cultivated land fragmentation, soil fertility, and the distance between home and agricultural technology stations. The results of this study provide an empirical basis for relevant government departments to carry out agricultural technology extension work and formulate relevant policies.

Adoption and impact of improved teff varieties adoption on food security: Micro level evidence from North Eastern Amhara Regional state, Ethiopia.

This study investigates the adoption and impact of improved teff varieties (ITVs) on food security in North Eastern Amhara Region, Ethiopia. The result of binary probit model shows that the adoption decision of improved teff varieties is determined by total family size measured in adult equivalent, off-farm income, number of traders known by farmers, variety information from development agents and research center affects positively and distance of farmer's residence from kebele office of agriculture negatively Endogenous switching regression (ESR)model was employed to evaluate the impacts of adoption of improved teff varieties on food security. The output from ESR asserted that had the adopter households decided not to adopt, their average daily calorie intake and annual food consumption expenditure per adult equivalent would have decreased by 417.908 kilocalorie and 1096.509 Ethiopian Birr(37.8.41 dollars) respectively. Thus, policies and development endeavors targeting to realize food security should facilitate the adoption of ITVs.

Sustaining resource-oriented sanitation behaviors through informal institutions: Evidence from China

Promoting safe sanitation behaviors is crucial to public health and resource recovery. Previous studies have shown that mandatory formal institutions can contribute to behavioral changes for safe sanitation, however, the impacts of informal institutions remain less explored. This study focuses on the “Red and Black List”, a typical informal institution in China's ongoing Rural Toilet Revolution, which is built on an emerging social credit system in rural China that punishes negative behaviors using blacklists while rewards positive behaviors using redlists. Based on the survey data of 1820 rural households, this study uses the endogenous switching regression (ESR) model to quantify the impact of the “Red and Black List” on household sanitation behaviors (hygiene management, toilet maintenance and effluents recycling). The results show that households in the villages adopting the “Red and Black List” are 11.63%, 20.89% and 29.35% more likely to perform well in hygiene management, toilet maintenance and effluents recycling respectively. Such treatment effects are greater in the villages adopting the “Red and Black List” with material rewards. Moreover, the implementation of the “Red and Black List” significantly increases regular monitoring activities, professional codes provision and households' emotional affinity through which informal institutions could possibly promote desirable sanitation behaviors. Based on these findings, the policy recommendation is that informal institutions on sanitation should be established in local governments to contribute to the success of sanitation campaigns.

Does Solar-Powered Irrigation System Usage Increase the Technical Efficiency of Crop Production? New Insights from Rural Areas

Fossil fuel and electricity-powered irrigation techniques boost the water availability expense and increase greenhouse gas emissions. Especially in developing countries, solar-powered irrigation is becoming more popular as a response to the growing energy and environmental issues associated with agriculture systems. The existing study used data from 1080 wheat farmers in Balochistan, Pakistan, to investigate the impact of solar-powered irrigation system (SPIS) usage on the technical efficiency (TE) of wheat production. The TE of wheat production is estimated using a stochastic frontier production function, and the potential self-selectivity bias is addressed using an endogenous switching regression model. The findings indicated that 13.7% of the wheat cultivators assessed used SPISs to produce their crops. Using an endogenous switching regression model shows that SPIS usage increases the TE of wheat growers by 6.657%, after controlling for self-selection bias. While using SPISs, wheat farmers with large farms and farming familiarity had stronger positive effects on TE. The results highlight the need for more investigation and research into evidence-based good practice for SPIS solutions at the site level to ensure that the rollout of modern equipment not only drives the energy sector forward but also contributes significantly to our level playing field and sustainable environment.

Composite effect of adaptation to climate variability, agrometeorological information, and socioeconomic and institutional factors on agricultural productivity in Kenya

Climate variability has adversely affected agriculture and adaptation strategies are significant in enhancing resilience hence ensuring food security. Agrometeorological services are essential in decision-making and developing farmers’ specific adaptive capacities mainly when variability affect agricultural productivity. This study focuses on the composite effect of adaptation to climate variability, agrometeorological information, socioeconomic and institutional factors on agricultural productivity in Kenya. Multi-stage sampling technique was used to obtain a sample size of 384 sorghum farmers. The study used an endogenous switching regression model to control for the selection problem arising from adaptation to climate variability on agricultural productivity. Results indicate that extension contacts and education level were positively significant among adapters of climate variability. Additionally, the proportion of income allocated for farming was positively significant among non-adapters. On the other hand, access to credit, gender and age of decision makers were negatively significant among adapters of climate variability. Similarly, age was negatively significant among non-adapters of climate variability. Overall, adapters to climate variability had higher sorghum output than non-adapters. This study recommends that policymakers and other key stakeholders could increase the number of extension contacts and promote education to farmers so that they can access agrometeorological information, hence adaptation to climate variability.

Do geohazards inhibit urban expansion at the regional scale? Evidence from a counterfactual analysis in Southwest China

The inhibiting effect of geohazards on urban expansion has been demonstrated at the site or local scale. At the regional scale, the more ambiguous relationship between urban development and geohazards is attributed to the complexity and adaptability of cities. Therefore, this study focussed on Southwest China because it has the largest number and greatest frequency of geohazards. The cloud model was applied to evaluate the geohazard susceptibility of the research area. Next, a novel econometric model—the endogenous switching regression model (ESRM)—was introduced to conduct a counterfactual analysis. The empirical results passed the robustness test and showed that the proportion of high-susceptibility areas in the study area was 30.4 %. Importantly, the change from low susceptibility to high susceptibility will reduce the expansion intensity by 1.62 %. In contrast, the expansion intensity will increase by 25.9 % if a high-susceptibility area turns into a low-susceptibility area. Nevertheless, geohazards still inhibit urban expansion at the regional scale. Finally, based on the concept of urban resilience, proposals are made to minimize the risk of hazard exposure through various adaptive paths in the post-pandemic era, thereby creating a resilient city that is better suited for urban development.

Natural resource extraction and ethnic inequality in Dak Lak, Vietnam

AbstractNatural resource extraction is an important livelihood strategy for poor rural households in developing and emerging countries. Despite the sharp decline in poverty in Vietnam, inequality still exists between the ethnic majority and minority. This paper aims to analyze the impact of natural resource extraction on ethnic inequality. We use panel data from Dak Lak in the Central Highlands of Vietnam. The Oaxaca-Blinder decomposition shows that ethnic differences in extraction are due to different group characteristics and different returns to these characteristics. Endogenous switching regressions find that extraction has heterogeneous effects on consumption across extracting and non-extracting households, and between majority and minority households. Treatment effects suggest that extraction sustains the consumption of extracting minority households because their consumption would decline if they stopped extracting. Our results indicate that it is important to improve the natural resource base and the ability of minorities to cope with shocks.

Does adoption of cocoa hand pollination (CHP) improve welfare of farmers? Evidence from smallholder cocoa farmers in Ghana

ABSTRACT This paper evaluates the impact of the adoption of cocoa hand pollination (CHP) on the welfare of smallholder cocoa producers. Using data collected from 1200 cocoa farmers in Huni Valley and Kejebril districts of Ghana, we employed endogenous switching regression, propensity score matching and inverse probability weighted adjustment techniques to assess the impact. The two-step Cragg was used to examine the determinants of the decision and intensity of adoption. The results showed that education, marriage and farm size positively influenced both the decision and intensity of adoption of the CHP technique. The result further showed that the cost of labour for implementing the technology, age, education, family head, economic active members, age of the cocoa tree, off-farm work, credit access and farm size significantly determined the impact of adoption on smallholder cocoa producers’ welfare. Additionally, there is a positive impact of CHP adoption on productivity, income and food security. Careful consideration should be given to these factors including collaborations between government and stakeholders in the cocoa industry through the regular sensitization and trainings for farmers on improved technologies as the CHP to increase productivity, household income and reduce food insecurity of smallholder cocoa farmers.

Ecological shocks and children’s school attendance and farm work in Ghana

Accelerating the education of children and reducing child labor in agriculture remains an important development pathway to preventing intergenerational poverty and achieving the sustainable development goals. While several studies have analyzed the impact of ecological stressors on yield, income, and food security, there is limited understanding of the linkages of prevailing ecological shocks to child education and farm work. In this paper, we examine the effect of ecological shocks of pest and weed invasion on children’s school attendance and working hours on the farm using the seventh round of the Ghana Living Standards Survey (GLSS). We employ a multinomial endogenous switching regression (MESR) model that corrects for selection bias and endogeneity originating from both observed and unobserved heterogeneity. The results show that double shocks (pests and weeds) reduced the number of children attending school by 11% and increased children’s on-farm working hours by 0.75 h. Comparatively, the decline in the number of children attending school due to weed invasion (0.88) is higher than the decline due to pest invasion (0.43). Furthermore, weed invasion increases children’s on-farm working hours by 0.05 h while pest invasion reduces children’s on-farm working hours by 0.08 h. Increasing access to improved agricultural technologies bundled with credit and policies are critical to reducing the threats from ecological shocks and improving farmers’ welfare. To avert the decline in school attendance and children’s working hours requires training farmers to reduce the practice of continuous cropping and to embrace crop rotation and fallow to reduce the spread of pests and weeds.

Impact of financial inclusion on household welfare in Ethiopia

Despite the overwhelming consensus on the positive effect of financial inclusion on economic outcomes, there is limited rigorous micro-econometric evidence on the causal impact of financial inclusion on household welfare in Ethiopia. This study uses the 2018 Ethiopian Socioeconomic Survey data and an endogenous switching regression model to investigate the determinants and the causal impact of financial inclusion on multiple measures of household welfare. The results suggest that households headed by older, more educated, wage or self-employed people in the non-agricultural sector are more likely to access financial services, as are those headed by non-Muslims. In addition, greater financial access appears to be associated with membership in a local social group (iddir), ownership of mobile phones, credit information, and knowledge of how to open bank accounts, but negatively associated with the distance from the household’s residence to the nearest formal financial institution. This study further indicates that financial inclusion has a positive and statistically significant impact on multiple household welfare indicators. The most considerable impact of access to formal financial institutions is on utility spending, followed by total expenditure, food expenditure, and education spending. These findings thus suggest that policies geared toward improving household access to formal financial institutions are essential to enhance household welfare in Ethiopia.

Public Agricultural Extension, Pest and Disease Experience, and Adoption of Improved Wheat Varieties

Improved varieties are considered critical for increasing crop yields worldwide. This study explored the effects of public agricultural extension and pest and disease experience on adoption of improved varieties using survey data on 525 wheat farmers in Anhui Province, China, to which the Heckman sample selection model was applied. The results showed that public agricultural extension had a significant positive relationship with adoption of improved varieties. Demonstration and training, as different forms of agricultural extension, both increased the probability of farmers adopting improved varieties, but only demonstration had a marked effect on degree of adoption. Pest and disease experience increased the probability of adoption of improved varieties by farmers and significantly enhanced the effect of public agricultural extension, but did not affect degree of adoption. Further analysis using an endogenous switching regression model revealed that adoption of improved varieties raised wheat yields by around 337.83 kg/ha. Public agricultural extension should thus be strengthened, especially for farmers with pest and disease experience, and a diversified, well-functioning agricultural extension system should be provided.

Is contract arrangement source of income gain among parboiled rice stakeholders in Benin? A doubly robust analysis

Rice supply remains insufficient for the world's consumption despite the agro-ecological potential, including the sub-Saharan African countries. The organization of the rice sector in Benin aims to a better profitability and above all in the increase in rice income of producers and processors. With this in mind, the objective of this study is to assess the impact of the contractual system on the earnings of parboiled rice stakeholders in the hill departments of Benin. For this reason, a random sample of 650 rice farmers spread over 400 producers and 250 processors made it possible to estimate of the Endogenous Switching Regression (ESR). The results of the estimates revealed that adherence to the agricultural contract as a function of socio-demographic factors such as human capital; gender; membership of an agricultural cooperative; have access to agricultural extension innovations and economic-institutional factors such as free entry into the market; access to quality agricultural products and access to credit. These results also confirm the positive effects of the acceptance of contracts on the parboiled rice income of the two actors. Adherence to agricultural contracts remains an effective agricultural policy likely to increase rice income in developing countries and in particular in the department of Collines which has a very high potential for arable land. The effective exploitation of these lowlands is a real source of increasing the rice supply in the perspective of insurance and guaranteeing better levels of food and nutritional security in Benin.

Are returns from adoption of soil conservation practices heterogeneous? Evidence from Indian agriculture

PurposeThis paper finds the returns from soil conservation practices and examines whether the welfare implications of adopting the conservation practices are heterogeneous across the farming groups in Indian agriculture.Design/methodology/approachThe study uses an endogenous switching regression (ESR) method on the data collected from the 77th round of National Sample Survey (2019–21) to quantify the returns from adopting soil conservation practices.FindingsIt finds that farmers adopting soil health conservation practices would have reduced their crop yield by 13% if they did not implement them. Similarly, smallholders who have not adopted soil health management practices would have increased crop yield by 16% if they had adopted the practices. The authors also observed that the returns from adopting soil health management practices vary across farming groups, where marginal and large farms tend to gain higher yields. Finally, the authors find that regardless of farm size, smallholders who did not adopt soil health management practices would benefit from adopting these with increased crop yields of 29%–31%.Research limitations/implicationsMore data could have been better for drawing policy implications, since the number of soil card users are relatively less.Originality/valueThis research work uses nationally representative data, which is first in nature on this very aspect.

Impact of Farmer Producer Organizations on Price and Poverty Alleviation of Smallholder Dry Chillies Farmers in India

This study investigates the impact of Farmer Producer Organizations (FPOs) on smallholder dry chilli farmers in Guntur district, Andhra Pradesh, with a focus on price realization and poverty alleviation. Two specific FPOs, Red Chilli Farmer Producer Organisation and Spoorthi Chilli Producers Company Ltd., from the Guntur district of Andhra Pradesh were chosen for the study based on their substantial business turnover and comprehensive backward and forward linkages to their farmer-members. The smallholder farmers were stratified into two groups viz., treated (161) and untreated (n = 315) based on the FPO membership criterion. The Foster-Greer-Thorbecke model revealed that the poverty incidence among untreated farmers was recorded at 0.691, which was approximately 49 percent higher than the poverty incidence of treated farmers (0.352). The depth and severity of poverty were also greater among untreated farmers, with a poverty depth of 0.494 compared to the lower value of 0.126 observed among treated farmers. The results from Endogenous Switching Regression Model revealed a significant positive relationship between FPO membership and both price realization and poverty alleviation. Farmers with FPO membership experienced 2.11 percent higher prices and 39.14 percent higher annual agricultural income compared to untreated. Factors such as education, adherence to Good Agricultural Practices, farm experience, access to improved inputs, and credit significantly influenced FPO membership. The study concludes that FPO membership plays a crucial role in improving the standard of living for smallholder dry chilli farmers by increasing prices and income. So, this research sheds light on the significance of FPOs in enhancing the economic well-being of smallholder dry chilli farmers in Andhra Pradesh.

Joint decision-making, technology adoption and food security: Evidence from rice varieties in eastern India

This study investigates the effect of married couples’ joint decision-making on rice variety selection on rice productivity—a measure of food security. The study uses the 2016 Rice Monitoring Survey and the endogenous switching regression (ESR) method. Results show that rice farms with joint decision-makers (husband and wife) would have higher yields, particularly in households that adopted MRVGen1 (before 1986) rice varieties. Thus, families with joint-decision making have higher food security. Intervention programs for food insecurity should acknowledge and incorporate information regarding the persons responsible for making rice varietal decisions and the characteristics of modern rice varieties to ensure food security.

Does cooperative membership stabilize farm income volatility? Evidence from the pig sector in China

PurposeFarm income in the agricultural sector is susceptible to natural and market risks. A large body of literature has studied the effects of cooperative membership on household welfare, technical efficiency, productivity and production behavior, yet little has been known about the impact of cooperative membership on farm income volatility. This paper aims to fill this research gap by investigating the relationship between cooperative membership and farm income volatility of Chinese pig farmers and drawing policy implications.Design/methodology/approachThis paper examines the effect of cooperative membership on farm income volatility, using data from a two-round survey of pig farmers in China. The authors employ an endogenous switching regression model to address the selection bias issues associated with unobserved factors simultaneously affecting farmers' participation in agricultural cooperatives and income earning activities.FindingsUsing household panel from a two-round survey of 193 pig farmers in China, this analysis highlights two key findings: (1) agricultural cooperative membership has significant and positive effect on farm income stability and (2) the impact of cooperative membership on farm income stability varies with production scale.Originality/valueThis research makes two contributions to the literature. First, this study contributes to the scant literature exploring the relationship between agricultural cooperatives and farm income stability. Second, to the best of the authors' knowledge, this is the first study that explores such relationship in a livestock sector. The pig sector in China and around the developing world has been increasingly challenged by multifaceted risks (e.g. price fluctuations, epidemic diseases, environmental regulations), and understanding the role of agricultural cooperatives in farm income stability of pig farmers is of great practical and policy significance.

Impact of compliance with European Union (EU) regulations on the income of actors along the cocoa supply chain in Osun state, Nigeria

Compliance with EU regulations has received a lot of attention, but, its impact on the welfare of actors along the cocoa supply chain has been left unexplored. The study investigated the impact of compliance with EU regulations on the income of actors along the cocoa supply chain. A multi-stage sampling technique was employed to select 200 cocoa farmers, 50 produce-buyers, 50 agrochemical sellers, and 10 exporters for the study. Primary and secondary data were analyzed using the Difference in Difference (DiD), Endogenous Switching Regression Model (ESRM), and T-test. The descriptive results showed that EU regulations have changed the pattern and direction of the cocoa beans trade in such a way that after the implementation of the EU regulations. The ESRM showed that the determinants of the decision to comply with EU regulations were mainly access to extension agents and membership in an association. The causal effect of complying with EU regulations resulted in a 61.43% increase in the gross income of the farmers. The t-test analysis for produce buyers and agrochemical sellers revealed that EU regulations had no significant impact on the income of compliance. DiD indicated that EU regulation had a 1% significant impact on the value of cocoa export. The study, therefore, concluded that compliance with EU regulations on cocoa had a positive impact on the income of cocoa farmers and exporters in the study area. In line with the findings of the study, it is recommended that policies and programs that would enhance adequate and timely information systems be put in place. There should be more access to extension services which will help to increase the extent to which actors comply with EU regulations for good-quality cocoa beans.