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On Crop Biodiversity, Risk Exposure, and Food Security in the Highlands of Ethiopia

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  • Salvatore Di Falco
  • Jean-Paul Chavas

Abstract

This paper investigates the effects of crop genetic diversity on farm productivity and production risk in the highlands of Ethiopia. Using a moment-based approach, the analysis uses a stochastic production function capturing mean, variance, and skewness effects. Welfare implications of diversity are evaluated using a certainty equivalent, measured as expected income minus a risk premium (reflecting the cost of risk). We find that the effect of diversity on skewness dominates its effect on variance, meaning that diversity reduces the cost of risk. The analysis also shows that the beneficial effects of diversity become of greater value in degraded land. Copyright 2007, Oxford University Press.

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  • Salvatore Di Falco & Jean-Paul Chavas, 2007. "On Crop Biodiversity, Risk Exposure, and Food Security in the Highlands of Ethiopia," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(3), pages 599-611.
    • Handle: RePEc:oup:ajagec:v:91:y:2007:i:3:p:599-611
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    File URL: http://hdl.handle.net/10.1111/j.1467-8276.2009.01265.x
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    Cited by:

    1. Xiaodong Du & David A. Hennessy & Cindy L. Yu, 2012. "Testing Day's Conjecture that More Nitrogen Decreases Crop Yield Skewness," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(1), pages 225-237.
    2. Kassie, Menale & Zikhali, Precious & Pender, John & Köhlin, Gunnar, 2009. "Sustainable Agricultural Practices and Agricultural Productivity in Ethiopia: Does Agroecology Matter?," RFF Working Paper Series dp-09-12-efd, Resources for the Future.
    3. Xavier Vollenweider & Salvatore Di Falco & Cathal O�Donoghue, 2011. "Risk preferences and voluntary agrienvironmental schemes: does risk aversion explain the uptake of the Rural Environment Protection Scheme?," GRI Working Papers 48, Grantham Research Institute on Climate Change and the Environment.
    4. Salvatore Falco & Marcella Veronesi, 2018. "Managing Environmental Risk in Presence of Climate Change: The Role of Adaptation in the Nile Basin of Ethiopia," Natural Resource Management and Policy, in: Leslie Lipper & Nancy McCarthy & David Zilberman & Solomon Asfaw & Giacomo Branca (ed.), Climate Smart Agriculture, pages 497-526, Springer.
    5. Jesse Tack & David Ubilava, 2013. "The effect of El Niño Southern Oscillation on U.S. corn production and downside risk," Climatic Change, Springer, vol. 121(4), pages 689-700, December.
    6. Xiaodong Du & Cindy L. Yu & David A. Hennessy & Ruiqing Miao, 2015. "Geography of crop yield skewness," Agricultural Economics, International Association of Agricultural Economists, vol. 46(4), pages 463-473, July.
    7. Takeshima, Hiroyuki, 2012. "Onset risk and draft animal investment in nigeria:," IFPRI discussion papers 1198, International Food Policy Research Institute (IFPRI).
    8. Alfani, Federica & Arslan, Aslihan & McCarthy, Nancy & Cavatassi, Romina & Sitko, Nicholas, 2021. "Climate resilience in rural Zambia: evaluating farmers’ response to El Niño-induced drought," Environment and Development Economics, Cambridge University Press, vol. 26(5-6), pages 582-604, October.
    9. Elisa Gatto & Alba Marino & Guido Signorino, 2013. "Biodiversity and risk management in agriculture: what do we learn from CAP reforms? A farm-level analysis," ERSA conference papers ersa13p805, European Regional Science Association.
    10. Zander, Kerstin K. & Signorello, Giovanni & De Salvo, Maria & Gandini, Gustavo & Drucker, Adam G., 2013. "Assessing the total economic value of threatened livestock breeds in Italy: Implications for conservation policy," Ecological Economics, Elsevier, vol. 93(C), pages 219-229.
    11. Chibwana, Christopher & Fisher, Monica & Shively, Gerald, 2012. "Cropland Allocation Effects of Agricultural Input Subsidies in Malawi," World Development, Elsevier, vol. 40(1), pages 124-133.
    12. Sanglestsawai, Santi & Rodriguez, Divina Gracia P. & Rejesus, Roderick M. & Yorobe, Jose M., 2017. "Production Risk, Farmer Welfare, and Bt Corn in the Philippines," Agricultural and Resource Economics Review, Cambridge University Press, vol. 46(3), pages 507-528, December.
    13. Xavier Vollenweider & Salvatore Di Falco & Cathal O�Donoghue, 2011. "The impact of risk on inequality: evidence from the Irish agricultural sector," GRI Working Papers 47, Grantham Research Institute on Climate Change and the Environment.
    14. Elisa Gatto & Guido Signorino, 2011. "Long-run relationship between crop-biodiversity and cereal production under the CAP reform: evidence from Italian regions," ERSA conference papers ersa11p964, European Regional Science Association.
    15. Charles Palmer & Salvatore Di Falco, 2012. "Biodiversity, poverty, and development," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 28(1), pages 48-68, Spring.
    16. Witt, Rudolf & Waibel, Hermann, 2011. "Constraints to diversification of poor fishery-dependent households in Cameroon," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 6(2), pages 1-21, September.
    17. Di Falco, Salvatore & Capitanio, Fabian & Adinolfi, Felice, 2011. "Natural Vs Financial Insurance in the Management of Weather Risk Exposure in the Italian Agriculture," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114325, European Association of Agricultural Economists.
    18. Skevas, Theodoros & Lansink, Alfons Oude & Stefanou, Spiro E., 2012. "Measuring technical efficiency in the presence of pesticide spillovers and production uncertainty: The case of Dutch arable farms," European Journal of Operational Research, Elsevier, vol. 223(2), pages 550-559.
    19. Salvatore Di Falco & Marcella Veronesi, 2014. "Managing Environmental Risk in Presence of Climate Change: The Role of Adaptation in the Nile Basin of Ethiopia," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 57(4), pages 553-577, April.
    20. Narloch, Ulf & Drucker, Adam G. & Pascual, Unai, 2011. "Payments for agrobiodiversity conservation services for sustained on-farm utilization of plant and animal genetic resources," Ecological Economics, Elsevier, vol. 70(11), pages 1837-1845, September.

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