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Rosemary E. Isoto_ PhD Thesis.pdf (1.5 MB)

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Essays on Human Capital Investments and Microfinance in East African Agriculture

Isoto, Rosemary Emegu
http://rave.ohiolink.edu/etdc/view?acc_num=osu1437652454

Abstract Details

2015, Doctor of Philosophy, Ohio State University, Agricultural, Environmental and Developmental Economics.
This dissertation focusses on three topics related to human capital investments, microcredit and agriculture in East Africa. The first essay investigates how health shocks affect farm productivity in the presence of microcredit. It is expected that microcredit increases agricultural productivity by enhancing allocative and technical efficiency and by overcoming financial constraints that reduce purchase of inputs. However, microcredit will have competing uses in the event of a health shock to the household; hence, it is important to investigate changes in farm productivity due to health shocks with and without microcredit. Existing studies on the microcredit-productivity relationship do not account for the effect of uninsured health shocks to the household. A theoretical model is developed and empirically tested using data from Uganda. The problem of self-selection into microcredit is addressed by use of an endogenous switching regression model. The results reveal that uninsured health shocks lower farm productivity. However, microcredit has a significant mitigating effect on the productivity losses. Microcredit effectively serves as insurance against health shocks in rural areas where formal health insurance markets do not exist. Thus, microcredit generates a double dividend in smallholder agriculture by both improving health status of the farm population and improving agricultural productivity. The second essay explores gender disaggregated effects of microcredit on capital accumulation using a nationally representative dataset from Uganda. The study contributes to the scarce literature on long term impact of microcredit on capital asset accumulation in SSA. Using panel data, issues of selection bias and endogeneity prevalent with microcredit impact evaluations are addressed. The results show that microcredit has a positive and significant effect on physical productive assets and human capital accumulation but no effect on non-productive assets. However, when data is disaggregated by gender, microcredit has a positive and significant effect on productive assets and human capital accumulation for only male-headed households. The study concludes that microcredit increases capital accumulation of men but not of women. The third essay examines the role of remittances in livelihoods of households in developing countries. Previous studies have shown that remittances are mostly utilized for investment in estates, agricultural inputs or education. Remittances may also be useful for smoothing consumption by poor rural households. This essay estimates the differences in consumption patterns for macronutrients and micronutrients between remittance recipients and non-recipients using data from Kilimanjaro, Tanzania. An instrumental variable strategy is adopted in econometric estimations of nutrient consumption to address issues of self-selection and endogeneity of net income and remittances. Furthermore, the instrumental variable quantile regression method is used to estimate the distributional effects of remittances. A major finding is that remittances increase investment in protein and selected micronutrients, vitamin A, vitamin C and calcium; these are nutrients that are vitally important for physical development of children and for improving the health of adults. Remittances do not have a significant effect on consumption of the macronutrients, carbohydrates and fats, or total calories.
David Kraybill, Ph.D (Advisor)
Abdoul Sam, Ph.D (Committee Member)
Joyce Chen, Ph.D (Committee Member)
156 p.
Agricultural Economics
Microfinance; Productivity; Health Shocks; Capital Accumulation; Remittances; Nutritional Intake; Developing Countries; Sub-Saharan Africa; East Africa

Recommended Citations

Citations

  • Isoto, R. E. (2015). Essays on Human Capital Investments and Microfinance in East African Agriculture [Doctoral dissertation, Ohio State University]. OhioLINK Electronic Theses and Dissertations Center. http://rave.ohiolink.edu/etdc/view?acc_num=osu1437652454

    APA Style (7th edition)

  • Isoto, Rosemary. Essays on Human Capital Investments and Microfinance in East African Agriculture. 2015. Ohio State University, Doctoral dissertation. OhioLINK Electronic Theses and Dissertations Center, http://rave.ohiolink.edu/etdc/view?acc_num=osu1437652454.

    MLA Style (8th edition)

  • Isoto, Rosemary. "Essays on Human Capital Investments and Microfinance in East African Agriculture." Doctoral dissertation, Ohio State University, 2015. http://rave.ohiolink.edu/etdc/view?acc_num=osu1437652454

    Chicago Manual of Style (17th edition)

osu1437652454
1,120
© 2015, some rights reserved.Creative Commons License Essays on Human Capital Investments and Microfinance in East African Agriculture by Rosemary Emegu Isoto is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License. Based on a work at etd.ohiolink.edu.
This open access ETD is published by The Ohio State University and OhioLINK.
Release 3.2.12