Journal articleIFPRI3; ISI; CRP2; Feed the Future Innovation Lab for Collaborative Research on Assets and Market Access; A Ensuring Sustainable food production; D Transforming AgricultureEPTD; PIMPRCGIAR Research Program on Policies, Institutions, and Markets (PIM

China’s economic reforms starting in the late 1970s have resulted in rapid economic growth, with annual growth in gross domestic product averaging greater than 10 percent per year for more than thirty years. Accompanying this rapid growth in national accounts have been rapid and widespread reductions in poverty. With these reductions in poverty, however, there has often been observed an increase in income inequality, both between as well as within rural and urban sectors. This rising income gap challenges the notion that economic reforms in China have been as successful as the poverty statistics would suggest. In this paper, we suggest that an alternative view would be to consider the effects of these reforms on changing the chronic nature of poverty and reducing household vulnerability to poverty. Using a balanced panel from rural China from 1991 through 2006, we find that most poverty among our sample has shifted from being chronic in nature to being transient, with households either shifting into a state of being non-poor moving in and out of poverty. Among our sample, vulnerability to poverty has been declining over time, but the declines are not uniform over time or space. We decompose household vulnerability status into two proximate causes: low expected income and high income variability, finding vulnerability increasingly due to income variability. Additionally, we demonstrate that vulnerable households have very different characteristics than non-vulnerable households.

We conduct a series of experiments in rural India in order to measure preferences related to risk, loss, and ambiguity. By combining these results with a discrete choice experiment over new and familiar rice seeds, we demonstrate how these behavioural parameters affect decisions to adopt new agricultural technologies, especially when the new technologies are risk reducing. We find that risk averse and loss averse individuals are more likely to switch to new seeds demonstrating risk reducing characteristics, while, contrary to expectations, ambiguity averse individuals are no more willing to retain their status quo than switch to cultivating the new variety.

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This study assesses both the demand for and effectiveness of an index insurance product designed to help smallholder farmers in Bangladesh manage crop production risk during the monsoon season. Villages were randomized into either an insurance treatment or a comparison group, and discounts and rebates were randomly allocated across treatment villages to encourage insurance take-up and to allow for the estimation of the price-elasticity of insurance demand. Among those offered insurance, we find demand to be fairly price elastic, with discounts significantly more successful in stimulating demand than rebates. Purchasing insurance yields both ex ante risk management effects as well as ex post income effects on agricultural production practices. The risk management effects lead to an expansion of cultivated area with concomitant increases in agricultural input expenditures during the monsoon season. The income effects lead to more intensive rice production during the subsequent dry season, with more intensive use of both irrigation and fertilizers, resulting in higher yields and higher total rice production.

Journal articleIFPRI3; ISI; CRP2; A.3 Science, Technology, and innovation Policy; CSISAEPTD; PIMPRCGIAR Research Program on Policies, Institutions, and Markets (PIM

In this paper, we demonstrate a method for measuring the effect of spatial interactions on the use of hybrid rice using a unique, nationally representative data set from Bangladesh. In order to circumvent the 'reflection problem', we consider an identification and estimation strategy employing a generalised spatial two-stage least squares procedure with near-ideal instruments to effectively identify causal influences. Results indicate that neighbour effects are a significant determinant of hybrid rice use. Further, using two specifications of spatial network systems, one based on samevillage membership (irrespective of distance) and the other based on geographical distance (irrespective of village boundary), we demonstrate that a network including nearby hybrid rice adopters is more influential than a network of more distant hybrid rice adopters, and merely having a network with a large number of adopters may be relatively meaningless if they are far away. Furthermore, we show that these network effects are much more important to hybrid cultivation than interactions with agricultural extension officers.