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Risk coping strategies and rural household production efficiency: quasi-experimental evidence from El Salvador

Alpizar, Carlos Andres
http://rave.ohiolink.edu/etdc/view?acc_num=osu1180206697

Abstract Details

2007, Doctor of Philosophy, Ohio State University, Agricultural, Environmental and Development Economics.
This dissertation examines the influence of exogenous shocks (weather and earthquakes) and differential access to financial services and risk-coping tools (remittances and precautionary wealth) on the production performance (technical efficiency) of rural households. The research uses nonparametric data envelopment analysis (DEA) to estimate output-based measures of efficiency for agricultural households. The analysis is conducted at the household (not just the farm) level, accounting for the role of off-farm activities. The data come from a four-observation survey panel data set (1995, 1997, 1999 and 2001) for rural households in El Salvador, which provides information on household characteristics and agricultural and non-agricultural activities. The period was marked by major exogenous shocks, creating a natural experiment, which allows examination of outcomes for treatment (affected) and control (not affected) households and eliminates reverse causation. The probability of being affected by the earthquake or weather shock was not related to pre-shock household characteristics. Tobit regressions are used to identify determinants of the computed efficiency scores, by separating the sample into those affected or not affected by the shocks and according to type of shock. Finally, to control for unobserved heterogeneity, difference-in-differences regression techniques are used to identify factors affecting efficiency and its changes over time. The results reveal that, on average, many households operate way below the frontier and that efficiency experiences much volatility over time. Nevertheless, there have been net improvements over the years, particularly for households with initially low levels of efficiency. Exogenous systemic shocks have temporarily reversed this process of improvement, which is associated with the structural transformation experienced by subsistence farmers that are in transition toward becoming more diversified and better integrated to markets. Distance to markets (transaction costs), operation of a microenterprise, and non-agricultural employment increase household efficiency. Land quality and human capital as well as the shocks matter. The availability of risk-managing tools significantly increases efficiency and its growth over time. Particularly important is the influence of access to deposit facilities, focusing attention on an ignored dimension of rural financial deepening. This may be the first time strong empirical evidence establishes a link between financial deposits and efficiency growth.
Claudio Gonzalez-Vega (Advisor)
223 p.
Economics, Agricultural
Technical Efficiency; Agricultural Households; DEA; Financial Services; El Salvador

Recommended Citations

Citations

  • Alpizar, C. A. (2007). Risk coping strategies and rural household production efficiency: quasi-experimental evidence from El Salvador [Doctoral dissertation, Ohio State University]. OhioLINK Electronic Theses and Dissertations Center. http://rave.ohiolink.edu/etdc/view?acc_num=osu1180206697

    APA Style (7th edition)

  • Alpizar, Carlos. Risk coping strategies and rural household production efficiency: quasi-experimental evidence from El Salvador. 2007. Ohio State University, Doctoral dissertation. OhioLINK Electronic Theses and Dissertations Center, http://rave.ohiolink.edu/etdc/view?acc_num=osu1180206697.

    MLA Style (8th edition)

  • Alpizar, Carlos. "Risk coping strategies and rural household production efficiency: quasi-experimental evidence from El Salvador." Doctoral dissertation, Ohio State University, 2007. http://rave.ohiolink.edu/etdc/view?acc_num=osu1180206697

    Chicago Manual of Style (17th edition)

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This open access ETD is published by The Ohio State University and OhioLINK.