Bayes Estimates of Distance-to-Market : Transactions Costs, Cooperatives and Milk-Market Development in the Ethiopian Highlands

Rationalizing non-participation as a resource deficiency in the household, this paper identifies strategies for milk-market development in the Ethiopian highlands. The additional amounts of covariates required for positive marketable surplus--distances-to market--are computed from a model in which p...

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Main Authors:	Holloway, Garth, Ehui, Simeon, Teklu, Amare
Format:	Journal Article
Language:	EN
Published:	2012
Subjects:	Model Construction and Estimation C510 Economic Development: Agriculture Natural Resources Energy Environment Other Primary Products O130 Agricultural Markets and Marketing Cooperatives Agribusiness Q130
Online Access:	http://hdl.handle.net/10986/5853

id	okr-10986-5853
recordtype	oai_dc
spelling	okr-10986-58532021-04-23T14:02:23Z Bayes Estimates of Distance-to-Market : Transactions Costs, Cooperatives and Milk-Market Development in the Ethiopian Highlands Holloway, Garth Ehui, Simeon Teklu, Amare Model Construction and Estimation C510 Economic Development: Agriculture Natural Resources Energy Environment Other Primary Products O130 Agricultural Markets and Marketing Cooperatives Agribusiness Q130 Rationalizing non-participation as a resource deficiency in the household, this paper identifies strategies for milk-market development in the Ethiopian highlands. The additional amounts of covariates required for positive marketable surplus--distances-to market--are computed from a model in which production and sales are correlated; sales are left-censored at some unobserved threshold; production efficiencies are heterogeneous; and the data are in the form of a panel. Incorporating these features into the modeling exercise is important because they are fundamental to the data-generating environment. There are four reasons. First, because production and sales decisions are enacted within the same household, both decisions are affected by the same exogenous shocks, and production and sales are therefore likely to be correlated. Second, because selling involves time and time is arguably the most important resource available to a subsistence household, the minimum sales amount is not zero but, rather, some unobserved threshold that lies beyond zero. Third, the potential existence of heterogeneous abilities in management, ones that lie latent from the econometrician's perspective, suggest that production efficiencies should be permitted to vary across households. Fourth, we observe a single set of households during multiple visits in a single production year. The results convey clearly that institutional and production innovations alone are insufficient to encourage participation. Market-precipitating innovation requires complementary inputs, especially improvements in human capital and reductions in risk. 2012-03-30T07:34:51Z 2012-03-30T07:34:51Z 2008 Journal Article Journal of Applied Econometrics 08837252 http://hdl.handle.net/10986/5853 EN http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Journal Article Ethiopia
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	EN
topic	Model Construction and Estimation C510 Economic Development: Agriculture Natural Resources Energy Environment Other Primary Products O130 Agricultural Markets and Marketing Cooperatives Agribusiness Q130
spellingShingle	Model Construction and Estimation C510 Economic Development: Agriculture Natural Resources Energy Environment Other Primary Products O130 Agricultural Markets and Marketing Cooperatives Agribusiness Q130 Holloway, Garth Ehui, Simeon Teklu, Amare Bayes Estimates of Distance-to-Market : Transactions Costs, Cooperatives and Milk-Market Development in the Ethiopian Highlands
geographic_facet	Ethiopia
relation	http://creativecommons.org/licenses/by-nc-nd/3.0/igo
description	Rationalizing non-participation as a resource deficiency in the household, this paper identifies strategies for milk-market development in the Ethiopian highlands. The additional amounts of covariates required for positive marketable surplus--distances-to market--are computed from a model in which production and sales are correlated; sales are left-censored at some unobserved threshold; production efficiencies are heterogeneous; and the data are in the form of a panel. Incorporating these features into the modeling exercise is important because they are fundamental to the data-generating environment. There are four reasons. First, because production and sales decisions are enacted within the same household, both decisions are affected by the same exogenous shocks, and production and sales are therefore likely to be correlated. Second, because selling involves time and time is arguably the most important resource available to a subsistence household, the minimum sales amount is not zero but, rather, some unobserved threshold that lies beyond zero. Third, the potential existence of heterogeneous abilities in management, ones that lie latent from the econometrician's perspective, suggest that production efficiencies should be permitted to vary across households. Fourth, we observe a single set of households during multiple visits in a single production year. The results convey clearly that institutional and production innovations alone are insufficient to encourage participation. Market-precipitating innovation requires complementary inputs, especially improvements in human capital and reductions in risk.
format	Journal Article
author	Holloway, Garth Ehui, Simeon Teklu, Amare
author_facet	Holloway, Garth Ehui, Simeon Teklu, Amare
author_sort	Holloway, Garth
title	Bayes Estimates of Distance-to-Market : Transactions Costs, Cooperatives and Milk-Market Development in the Ethiopian Highlands
title_short	Bayes Estimates of Distance-to-Market : Transactions Costs, Cooperatives and Milk-Market Development in the Ethiopian Highlands
title_full	Bayes Estimates of Distance-to-Market : Transactions Costs, Cooperatives and Milk-Market Development in the Ethiopian Highlands
title_fullStr	Bayes Estimates of Distance-to-Market : Transactions Costs, Cooperatives and Milk-Market Development in the Ethiopian Highlands
title_full_unstemmed	Bayes Estimates of Distance-to-Market : Transactions Costs, Cooperatives and Milk-Market Development in the Ethiopian Highlands
title_sort	bayes estimates of distance-to-market : transactions costs, cooperatives and milk-market development in the ethiopian highlands
publishDate	2012
url	http://hdl.handle.net/10986/5853
_version_	1764396545943273472

Bayes Estimates of Distance-to-Market : Transactions Costs, Cooperatives and Milk-Market Development in the Ethiopian Highlands

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