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Caste as an Impediment to Trade

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  • Siwan Anderson

Abstract

We compare outcomes across two types of villages in rural India. Villages vary by which caste is dominant (owns the majority of land): either a low or high caste. The key finding is that income is substantially higher for low-caste households residing in villages dominated by a low caste. This seems to be due to a trade breakdown in irrigation water across caste groups. All else equal, lower caste water buyers have agricultural yields which are 45 percent higher if they reside in a village where water sellers are of the same caste compared to one where they are not. (JEL O12, O13, O17, O18, Q15, R23, Z13)

Suggested Citation

  • Siwan Anderson, 2011. "Caste as an Impediment to Trade," American Economic Journal: Applied Economics, American Economic Association, vol. 3(1), pages 239-263, January.
    • Handle: RePEc:aea:aejapp:v:3:y:2011:i:1:p:239-63
    Note: DOI: 10.1257/app.3.1.239
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    References listed on IDEAS

    as
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    3. Abhijit Banerjee & Lakshmi Iyer, 2005. "History, Institutions, and Economic Performance: The Legacy of Colonial Land Tenure Systems in India," American Economic Review, American Economic Association, vol. 95(4), pages 1190-1213, September.
    4. Kaivan Munshi & Mark Rosenzweig, 2008. "The Efficacy of Parochial Politics: Caste, Commitment, and Competence in Indian Local Governments," NBER Working Papers 14335, National Bureau of Economic Research, Inc.
    5. Singh, D.R. & Singh, R.P., 2003. "Groundwater Markets and the Issues of Equty and Reliability to Water Access: A Case of Western Uttar Pradesh," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 58(1), March.
    6. George Akerlof, 1976. "The Economics of Caste and of the Rat Race and Other Woeful Tales," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 90(4), pages 599-617.
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    More about this item

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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