Switching Regression Model Research Articles

Adaptation to climate variability and household welfare outcomes in Uganda

Over the last one decade, most of the empirical studies on climate variability have largely concentrated on assessing the effect of climate variability on agriculture. Little attention has been given to the analysis of what factors determine the decision to adapt to climate variability and what impact does it has on welfare of the adapting households. This paper therefore, assesses the determinants of adaptation to climate variability and how it influences welfare of the farming households in Uganda. To achieve this, the study utilizes six waves of Uganda National Panel survey collected by Uganda Bureau of Statistics spanning over a period of 10 years from 2009 to 2019 and the switching regression model for empirical analysis. The findings indicate that adapting to climate variability is beneficial to adaptors as it safeguards welfare deterioration. On the other hand, presence of climate variability, age of the household head, the value of household assets, location, formal land ownership, having main occupation as agriculture and availability of extension services were identified as key determinants of the decision to adapt to climate variability among farming households in Uganda. These findings thus highlight the importance to have measures to improve adaptation process at the same time enhancing household welfare.

Welfare effect of rice outgrower scheme participation: empirical evidence from northern Ghana

Outgrower schemes can improve farmers’ welfare by boosting farm productivity and increasing market participation. In this context, we examined the effect of participating in outgrower schemes on household welfare indicators while controlling for potential observed and unobserved biases that could influence the outcomes. To address this objective, we employed an endogenous switching regression model to analyze primary data from 555 rice farmers in northern Ghana who use irrigation. The results revealed significant effect of sex of household’s head, age, marital status, education, dependency ratio, non-farm work, extension contact, access to credit, membership of farmer group, proximity to commercial markets, distance to outgrower schemes, familiarity with scheme operations, and the geographical location of the farmer on the propensity to participate in outgrower schemes. Importantly, participation in outgrower schemes resulted in a 57.6%, 23.6%, and 48.1% increase in household consumption expenditure per capita, income per capita, and asset ownership, respectively, exceeding what participants could have gained if they had not participated. Similarly, the non-participants, would have experienced a 21.2%, 34.0%, and 26.1% increase in household consumption expenditure per capita, income per capita, and assets, respectively, if they had joined the scheme Therefore, strategies to improve farmer groups and extension services are required as they are critical channels for encouraging more farmers to participate in the schemes and thereby improving their welfare.

Does Adoption of Multiple Climate‐Smart Agriculture Practices Improve Rural Farm Households' Food Security in Ethiopia?

ABSTRACTClimate‐smart agriculture (CSA) is a set of economically and environmentally friendly practices that can address the issues of food security under the new realities of climate change. However, the adoption of these practices among smallholder farmers is still low, especially in developing countries like Ethiopia. Thus, the main objective of this study was to assess the factors determining rural farm households' adoption of CSA practices and their impact on food security in the Sidama region, Ethiopia. Primary data for this study were obtained from a randomly selected sample of 523 households using a pre‐tested, structured questionnaire. The collected data were analyzed using descriptive statistics, multivariate probit, and an endogenous switching regression model. The study found that, in the study area, conservation of agriculture is the most popular CSA practice, which is adopted by 96.2% of the adopters, followed by soil fertility management (82.2%), crop diversification (62.3%), small‐scale irrigation (47.9%), and crop–livestock integration (40.7%). The multivariate probit model revealed that the sex of the household head, age of the household head, educational level of the household head, extension contact, information on climate change, and distance to the market were identified as determinants for the adoption of CSA practices. Furthermore, the endogenous switching regression model analysis revealed that adoption of CSA practices increased rural farm household food security status. Therefore, this paper suggests that smallholder farmers should incorporate CSA practices to improve their food security.

Economic and Environmental Effects of Farmers’ Green Production Behaviors: Evidence from Major Rice-Producing Areas in Jiangxi Province, China

This study examines the economic and environmental impacts of green production practices among farmers. It aims to contribute to sustainable agricultural development, mitigate agricultural non-point source (NPS) pollution, and align environmental protection with economic growth. This paper utilizes survey data from 1345 farm households in the main rice production areas of Jiangxi Province, China, using the example of reduced fertilizer application (RFA) among rice farmers. This study constructs a slack-based measure data envelopment analysis (DEA—SBM) model with undesirable outputs to measure environmental effects and applies an endogenous switching regression model (ESRM) to test the economic and environmental effects of farmers’ adoption of green production technologies. We found the following: (1) The RFA behavior of farmers has a significant positive impact on their net profit per hectare (NPH), helping farmers increase their income, with the increase ranging from 2.05% to 6.54%. (2) Farmers’ RFA behavior has a significant positive impact on agricultural green productivity (AGP), contributing to the improvement of the environment, ranging from 44.09% to 45.35%. (3) A heterogeneity analysis found inconsistencies in the income-enhancing and environmental-enhancing effects at different quantiles of NPH and AGP. Therefore, attention should be placed on improving the agricultural product quality supervision system under the market circulation mechanism, creating land scale conditions conducive to the promotion and application of fertilizer reduction technologies and promoting the implementation of externality internalization compensation systems.

Socioeconomic Drivers of Food Insecurity Among Rural Households: Evidence from Participating Farmers in the Integrated Rice-Fish System 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, which has implications for 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 N 2,456.42, and the food security line is N 1,026.43. The food security measure shows that 46.67 percent of the households experience the incidence of food insecurity, 24.6 percent point is the food insecurity depth, and 17.2 percent 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 developmental programmes that focus on poverty alleviation, which should be gender inclusive with an option of credit support to the rice farmers.

Access to credit and scale efficiency: Evidence from family farms in East China

Productivity improvement is an important driving force for developing countries to accelerate the development of agricultural sectors and promote the transformation of economic structures. However, few studies have focused on the impact of credit access on family farms’ scale efficiency, a contributor to productivity changes. We address this gap by using data collected from a survey of 565 family farms in East China. The stochastic frontier input distance function (SFIDF) is utilized to measure the scale efficiency, and the endogenous switching regression model (ESRM) is employed to estimate average treatment effect (ATT) and address the selection bias. The empirical results show that the average scale efficiency is 0.768, with credit users and non-users averaging 0.802 and 0.737, respectively. Most family farms operate below their optimal production scale, and only about 14.5% of family farms exceed this optimal scale. Access to credit has significantly improved the scale efficiency of family farms and has not contributed to the excessive pursuit of scale expansion for financial subsidies. These findings are validated by robustness checks. The conclusions of our study have important implications for developing countries seeking to increase financial support for agricultural development.

The interplay of drought, human–wildlife conflict and food security: Insights from rural Zimbabwe

AbstractThe frequency and severity of drought has been increasing in Southern Africa against the backdrop of an increase in the population of both humans and wildlife, most notably elephants. This has increased the incidents of human–wildlife conflict (HWC) due to competition for food and water, further complicating both conservation efforts and food security for farmer‐households juxtaposed to wildlife corridors. We seek insights into these issues by examining the role of drought in inducing HWC in rural Zimbabwe and investigate the effect of HWC on the food‐security status of rural households. We utilise data from the 2023 nationally representative survey of rural Zimbabwean households in this endeavour. To avoid the confounding problem associated with self‐selection into a HWC household and taking into account the count nature of our outcome variable, we employ the endogenous switching regression model with count data. The results provide three major insights. First, drought occurrence increases the likelihood of HWC among rural farmer‐households. Second, HWC increases rural household vulnerability to food insecurity. Finally, the HWC shock is inconsequential on farmer‐household food insecurity if the farmer‐household has already suffered the drought shock.

Does cluster beekeeping improve the efficiency of honey production in participant households in southwestern Ethiopia?

The purpose of this study is to understand the determinants of participation in cluster beekeeping and its impact on the technical efficiency of honey production in southwestern Ethiopia. To this end, cross-sectional data from a household survey conducted in 2023 from 385 sample households in 3 districts were used for the analysis. An endogenous switching regression model with a probit model was used to analyze the impact of clustering beekeepers on the technical efficacy of honey production. The results of the study showed that honey production was significantly and favorably affected by the total number of hives, type of hive, and distance to an accessible forest. As indicated by the average technical efficiency (TE) at 72 %, the actual quantity of production differed from the desired production volume. The results show that the gender of the household head, access to training, access to credit, market information, frequency of extension contacts, and age of the household head are the most important determinants of households' decision to participate in group beekeeping. In addition, the result of the endogenous switching regression (ESR) model shows that participation in group beekeeping has a positive and significant effect on honey production efficiency as measured by technical efficiency (TE). Farmers who participated in cluster beekeeping were technically less inefficient than those who did not participate. Therefore, policies and development strategies that encourage further participation in cluster beekeeping could improve the efficiency of honey production of smallholder farmers in Jimma Zone, southwestern Ethiopia.

Exploring the income impact of rural e-commerce comprehensive demonstration project and determinants of county selection

The development of rural e-commerce in China is viewed as an opportunity to increase rural income. Using panel data from 592 national-level key poverty-stricken (NLKPS) counties from 2014 to 2020, we confirm that the National Rural E-commerce Comprehensive Demonstration Project (NRECDP), launched by the Chinese government, delivers significant rural income growth for selected counties by providing financial support. Digital inclusive finance has facilitated rural e-commerce development, thereby promoting rural income. Our study uses the endogeneity switching regression (ESR) model to address self-selection bias and finds that NRECDP participation increases rural income by ~12.97%. The determinants of participation in the NRECDP include levels of economic development, e-commerce development, infrastructure development, industry structure, and digital inclusive finance. Additionally, the determinants of rural income include education levels and population density. Moreover, our heterogeneity analysis reveals that the rural income growth effect of NRECDP involvement is more significant for NLKPS counties in non-ethnic regions, central regions, higher industry structures, and the three regions and three prefectures. Additionally, entrepreneurship serves as a potential channel linking NRECDP implementation and rural income growth.

The effects of multiple agricultural advisory service providers on farmers’ productivity in Tanzania

ABSTRACT Despite existence of multiple agricultural advisory service providers, there is limited evidence on their contribution to farmers’ productivity. This study applied the multinomial endogenous switching regression model to analyze incremental effects of multiple advisory service providers on the partial and total factor productivities of 665 farmers in Tanzania. The study contributes to the literature by using number of service providers rather than binary or frequency measures of extension access. Results showed that farmers working with two service providers had higher improvement in the productivity of maize as well as all crops grown than those using one, three or four service providers. We recommend targeting of agricultural advisory services to meet specific needs of different crops grown by farmers in various localities, enhanced coordination and monitoring of service providers to enhance the relevance, quality and timeliness of the services provided by different actors so as to improve farm productivity levels.

Impact of regional pest control on pesticide application in China from a perceived risks perspective

The Regional Pest Control program represents a strategic intervention aimed at optimizing pesticide use in crop production, thereby mitigating the environmental impact of agricultural non-point source pollution from pesticides and fostering the development of high-quality agriculture. This study examines the influence of farmers’ perceived risks on the adoption of the Regional Pest Control program and evaluates its effect on pesticide application across a nationally representative dataset from Heilongjiang, Jiangsu, Anhui, Hubei, and Sichuan provinces. To account for unobserved heterogeneity, an endogenous switching regression model was employed. The findings reveal that farmers’ perceived risks associated with the Regional Pest Control program significantly deter its adoption. Furthermore, the program has been effective not only in reducing the frequency of pesticide applications but also in increasing the usage of pesticides with lower acute toxicity levels. Notably, the impact of the Regional Pest Control program on pesticide application demonstrates considerable variation in accordance with farmers’ risk attitudes.

Impact of cluster farming on wheat productivity and net benefit among smallholder farmers in Lemu-Bilbilo and Hetosa districts of Arsi Zone, Ethiopia

This study focuses on identifying the determinants of cluster farming participation decisions and the impact of cluster farming on smallholder wheat farmer’s productivity in the two districts of Arsi Zone, Ethiopia. The study utilized cross-sectional data and a multistage sampling procedure to select a total of 381 respondents from the two districts of Arsi Zone, Ethiopia. The endogenous switching regression model was employed to achieve the research objectives. The study result indicates that sex of the household head, education level, size of cultivated land, access to training, membership in a farmer's cooperative, access to information and social responsibility of the household head influenced cluster farming participation positively and significantly, while distance from the nearest market had a negative and significant effect on cluster farming participation. Furthermore, the study shows that, if participants had decided not to practice cluster farming, their wheat yield and net benefit would have decreased by 33.57 and 40.08%, respectively. Similarly, had non-participants decided to participate, their wheat yield and net benefit would have increased by 46.79 and 102.49%, respectively. The study recommends that policymakers and development organizations should consider cluster farming as a main strategy to increase smallholder farmer’s productivity. Moreover, the study calls for government and institutional assistance in the areas of education services, training, extension services, infrastructure (particularly access to markets), and cooperative development. Moreover, policy and development measures should address the issue of gender disparities in cluster farming participation.

Adoption of organic soil fertility measures and their impact on farm outcomes: a case study of millet cultivators in India

This article investigated the economic impact of adopting organic soil fertility measures (OSFM) on millet farming outcomes in rainfed regions of rural India. Using survey data from 900 millet farmers, the analysis applied an endogenous switching regression model to correct for selection bias arising from both observable and unobservable factors. The results indicated that factors such as soil type, use of farmyard manure, crop diversification, gender of the household head, access to agricultural resources, proximity to residence and markets and education levels significantly influenced farmers’ adoption of OSFM. Notably, the adoption of OSFM had a positive and statistically significant impact on farm profits, with OSFM adopters gaining ₹5998 more than nonadopters. The average treatment effect on the treated for OSFM was 9.80% higher than for non-OSFM farmers. These findings reinforcing the importance of promoting OSFM practices in similar rainfed farming regions of the country.

Impact of behavioural intention to adopt climate-smart agricultural practices on the food and nutrition security of farming households: A microeconomic level evidence

The study examined the behavioural intention to adopt climate-smart agricultural practices (CSA) and its impact on the food-nutrition security (FNS) of farming households in South Africa. We employed a multistage sampling procedure to select rural maize farmers across the selected villages. To determine the impacts of behavioural adoption of CSA on the FNS of farming households, endogenous switching regression model (ESRM) was employed, while household dietary diversity score (HDDS) and household food insecurity access score (HFIAS) were used to determine the FNS status of the households. The findings emphasized the significance of the behavioural intentions of rural maize farmers, assessed through their attitudinal dimensions (measured in terms of perceived social norms, behavioural intentions, and control) in influencing the adoption decision of CSA practices, hence CSA adoption positively impacts FNS in South Africa. The result indicates that households that adopt CSA observe a 27% and 23% increase in HDDS and a decrease in HFIAS compared to those who do not adopt CSA practices, respectively. Thus, the outcome illustrates that the adoption of CSA practices substantially enhances the HDDS and HFIAS of rural maize farming households in South Africa. Following this backdrop, a concerted effort to raise knowledge of CSA practices through disseminating pertinent information will exert influence on the farmers' adoption behaviour towards CSA practices, which is capable of improving the FNS of rural maize farmers.

Impacts of alcohol consumption on farmers’ mental health: Insights from rural China

The global mental health crisis presents a significant challenge to sustainable development, and this crisis is more pronounced in China's rural areas versus urban areas. Alcohol consumption has increased in rural areas with China's economic growth, but the number of studies on the relationship between farmers' alcohol consumption and their mental health is limited. Based on data from the China Labor Force Dynamics Survey (CLDS), this study uses the endogenous switching regression model (ESR) to analyze the influence of alcohol consumption on farmers' mental health. On this basis, the study further conducts a counterfactual analysis to estimate the average treatment effect of alcohol consumption on farmers' mental health. The results show that: (1) There is a significant positive relationship between alcohol consumption and farmers' mental health. Specifically, the mental health index of drinking farmers increases by 19.7 % compared to non-drinking farmers. (2) Heterogeneity analysis shows that alcohol consumption is more beneficial for improving the mental health of male farmers, elderly farmers, and employed farmers. Furthermore, drinking alcohol almost every day, consuming Baijiu, and each drinking consumption ranging from 0 to 100 mL per occasion are more conducive to improving farmers' mental health. These findings have implications for relieving depressive symptomology and improving farmers' mental health in developing countries. The results of this study also provide guidance for addressing the global mental health crisis.

Market Reactions to U.S. Financial Indices: A Comparison of the GFC versus the COVID-19 Pandemic Crisis

This study delves into the impacts of the 2008 global financial crisis (GFC) and the COVID-19 health crisis on U.S. financial indices, exploring the intricate relationship between economic shocks and these indices during downturns. Using Markov switching regression models and control variables, including GDP, consumer sentiment, industrial production, and the ratio of inventories-to-sale, it quantifies the effects of these crises on the CBOE Volatility Index (VIX), Standard & Poor’s 500 (S&P 500), and the Dow Jones Industrial Average (DJIA) from Q1 2000 to Q2 2023, covering crucial moments of both crises and stable periods (dichotomous variables). Results reveal that the 2008 crisis significantly heightened financial volatility and depreciated the valuation of S&P 500 and DJIA indicators, while the COVID-19 crisis had a diverse impact on market dynamics, particularly negatively affecting specific sectors. This study underscores the importance of consumer confidence and inventory management in mitigating financial volatility and emphasises the need for robust policy measures to address economic shocks, enhance financial stability, and alleviate future crises, especially during endogenous crises such as financial downturns. This research sheds light on the nuanced impact of crises on financial markets and the broader economy, revealing the intricate dynamics shaping market behaviour during turbulent times.

Can farmer organization membership improve household food security and nutrition? Evidence from Northern Ghana

AbstractWe examine the impact of farmer organization (FO) membership on food and nutrition security among rural rice farmers, using cross‐sectional data from a household survey from Ghana. We employ an endogenous switching regression (ESR) model to account for selection bias from observed and unobserved factors. Our findings show that participation in FOs significantly increases household dietary diversity by 10.56% and reduces food insecurity by 9.7%. The residualized quantile regression model results are consistent with the ESR model across both outcome variables. Policymakers should consider promoting FO membership as a strategy to enhance food and nutrition security among smallholders in developing countries.

Exploring combined adaptation strategies to improve crop yield and smallholder farmers’ welfare

ABSTRACT This study investigates whether combinations of climate change adaptation strategies are associated with improved yield and smallholder farmers’ welfare, using a random sample of 200 maize producers in Benin. It employs an extended regression model to address the selection bias and endogeneity issues. Furthermore, as a robustness check, a multinomial endogenous switching regression model is also estimated. Results indicate that tree planting and the use of improved variety are the single strategies that increase yield. However, when combined with other strategies, the effects decrease for tree planting while increasing for the use of improved variety. With regard to the welfare equation, the only improved variety is the single strategy that increases food expenditure per capita, and the effect increases when combined with other strategies. Overall, the results reveal that the use of improved variety is the single strategy that increases both yield and smallholder farmers’ welfare, and combined with other strategies, the effect increases. These findings suggest that the adoption of combined adaptation strategies is important for ensuring smallholder farmers’ welfare.

Collective market action, farm performance, and household welfare among maize farmers: the role of outgrower scheme in Northern Ghana

ABSTRACT Although outgrower scheme facilitates farmers’ collective action in agri-food value chain market participation, evidence of its impacts on farm performance and welfare is still limited. We examine the determinants and impact of outgrower scheme collective market participation on farm performance and household welfare in northern Ghana, using a multinomial endogenous switching regression (MESR) model to account for selectivity bias. The empirical findings show that participants in collective input and output markets as well as the joint markets outperform nonparticipants in terms of farm performance (commercialization and net farm income) and household expenditure, with the highest gains associated with joint market participation. We also observed that factors such as gender, age, extension service, credit, transaction cost, and awareness of outgrower scheme significantly influence farmers’ inclusion in group marketing. The findings suggest that policies that facilitate farmers’ access to agricultural inputs and output markets in collective action should be implemented through public–private partnerships to enhance farm performance and the livelihood of farmers.

Off-farm work, adoption of resource-conservation technology, and farm performance: evidence from banana farmers in China

ABSTRACT Resource-conservation technology (RCT) can optimize the use of natural resources, reduce waste, and promote sustainability in agricultural development. However, the dissemination of RCT among small-scale farmers still remains at a low level in developing countries. This paper examines the impact of off-farm work on farmers’ adoption of RCT using the endogenous switching probit (ESP) model, detects mediating factors between them, and further explores the farm performance of RCT using the endogenous switching regression model (ESR) based on the primary data of 524 banana farmers in rural China. The results show that off-farm work has a positive impact on farmers’ adoption of RCT. Farmers with off-farm work are more likely to adopt RCT compared with those without off-farm work due to off-farm work could increase farmers’ positive cognition on the new agriculture technology. Specifically, off-farm work expands farmers’ information acquisition channels and improves farmers’ agriculture technology acknowledge and thereby promote farmers’ adoption of RCT. Moreover, the adopters of RCT have a higher agricultural yield than the non-adopters. Our findings emphasize a positive farm performance of RCT in small-scale farms in developing regions.