Smallholder Farming Households’ Make-or-Buy Decisions: Linking Market Access, Production Risks, and Production Diversity to Dietary Diversity

Keenan, Michael; Ng’ang’a, Stanley Karanja; Pamuk, Haki; Ruben, Ruerd

doi:10.2139/ssrn.4235974

Cited by 4 publications

(8 citation statements)

References 32 publications

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“…However, farms with high market access are expected to have a more diverse consumption when they produce fewer food groups, as income gains through specialization allows them purchase a more diverse set of foods on the market. Their empirical results from Tanzania show some significant effects in the proposed directions, but the links between production diversity and the choice of a diverse set of food groups are found to be generally weak or “practically insignificant” (Keenan et al. , 2021).…”

Section: Methodsmentioning

confidence: 99%

Section: Methodsmentioning

confidence: 99%

“…Since market failures occur on household level and not market level, different farm households face varying degrees of market failure and thus may have different price markups (De Janvry et al, 1991;Keenan et al, 2021). Therefore, a consistent estimation of aggregate demand requires incorporating household-specific characteristics describing or determining failures in their agricultural input markets.…”

Section: Accounting For Potential Endogeneitymentioning

confidence: 99%

“…Furthermore, the approach of adding control variables to the demand model allows the demand response to shift with respect to different levels of own consumption but cannot correct that observed prices might be endogenous. A recent study by Keenan et al (2021) does develop an agricultural household model for multiple production and consumption goods and analyzes the relationship between production diversity and consumption diversity for households in Tanzania. Their study reveals new insights into the linkages between production and consumption at different levels of market access, but since they analyze consumption based on nutritional indicators such as a food diversity index or anthropometric measures, they cannot be applied for estimating nutrient demand.…”

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Food demand and the nutrient intake of households in underdeveloped rural regions of China: an instrumental variable approach

Kuhlgatz

Huang

Antonides

2022

CAER

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PurposeThe purpose of this paper is to evaluate the effects of price and income changes on food and nutrient demand of rural households by including own-produced food and production-side effects in the demand estimation to correct potential measurement bias in the income and price elasticities for rural households in underdeveloped areas. Simulation results of income and grain price changes on food and nutrition security are provided for economic nutrition security policy applications.Design/methodology/approachThis study analyzes survey data of 1,555 households from underdeveloped rural areas of China to find out how price and income changes affect food and nutrition insecurity of rural households. The authors employ the quadratic almost ideal demand system (QUAIDS) in a two-stage budgeting framework, using quality adjusted prices that were retrieved with regressions of the difference between the unit value surveyed at household level and its village average on household characteristics. The bias correction is implemented by using an augmented IV (instrumental variable) method, in which each market price is instrumented with farm-specific variables. Important macro- and micronutrient elasticities are computed for (a) households with agriculture as main income and (b) other households (of which still many have agriculture as a side business). Finally, the authors use these elasticities to simulate how changes in income or grain prices affect the food and nutrition security in the studied areas.FindingsIn general, food income elasticities of agricultural households are at a higher level than those for other households, and so are the food price elasticities. Income changes also have a greater nutritional effect on agricultural households than on other households. Nutrient income elasticities ranged from 0.22 (energy) to 0.27 (Vitamin A) for agricultural households and from 0.19 (energy) to 0.23 (Vitamin A) for other households. Grain price increases have greater effect on nutritional status of non-agricultural households, while a grain price reduction is not clearly favoring the nutritional situation of a particular household group.Originality/valueThis demand study contributes to the literature by taking into account differences in consumption of own production between households and the potential endogeneity of prices resulting thereof. The authors also demonstrate that merely reporting nutrient elasticities might not be sufficient for policy recommendations, and simulations should be reported as a valuable addition.

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Section: Methodsmentioning

confidence: 99%

Section: Methodsmentioning

confidence: 99%

Section: Accounting For Potential Endogeneitymentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Food demand and the nutrient intake of households in underdeveloped rural regions of China: an instrumental variable approach

Kuhlgatz

Huang

Antonides

2022

CAER

View full text Add to dashboard Cite

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Diversification for Enhanced Food Systems Resilience

Hertel

Elouafi

Tanticharoen

et al. 2023

Science and Innovations for Food Systems Transformation

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Resilience at the individual, community, government and global food system levels must be built in such a way that the economic, social and environmental bases to generate food security and nutrition for current and future generations are not compromised anywhere in the world. We present opportunities for diversification of production, diversification at the household level, and diversification through the global, regional and local trading systems for resilient food systems. There are a number of trade-offs which must be navigated as we strive to achieve greater food system resilience. These include the need to deliver short-term humanitarian aid without jeopardizing long run development, mitigation of rising global temperatures even as the food system adapts to the inevitable changes in the earth’s climate, taking advantage of the benefits of globalization while avoiding the downsides, and encouraging agricultural production and boosting rural incomes while also protecting the environment. Much will be gained for resilience building by highlighting successful solutions and facilitating the exchange of tools, data, information and knowledge and capacity.

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