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The Impact of Extension Services on Farm‐level Income: An Instrumental Variable Approach to Combat Endogeneity Concerns

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  • Anthony Cawley
  • Cathal O’Donoghue
  • Kevin Heanue
  • Rachel Hilliard
  • Maura Sheehan

Abstract

Agricultural extension is an important policy instrument utilized to diffuse knowledge and increase profitability among farmers. However, analyses on impact are subject to endogeneity concerns, causing multiple biases. Failure to combat endogeneity can lead to false inferences on impact. This article addresses this issue by applying an instrumental variable approach with distance to local advisory office and a policy change chosen as instruments for extension participation. The results show that participation significantly increased farm income and that OLS estimates underestimated the impact. Therefore, a superior estimate of impact is achieved which can be leveraged to better support accurate policy making.

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  • Anthony Cawley & Cathal O’Donoghue & Kevin Heanue & Rachel Hilliard & Maura Sheehan, 2018. "The Impact of Extension Services on Farm‐level Income: An Instrumental Variable Approach to Combat Endogeneity Concerns," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 40(4), pages 585-612, December.
    • Handle: RePEc:wly:apecpp:v:40:y:2018:i:4:p:585-612
    DOI: 10.1093/aepp/ppx062
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    Cited by:

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    2. Yitayew, Asresu & Abdulai, Awudu & Yigezu, Yigezu A., 2023. "The effects of advisory services and technology channeling on farm yields and technical efficiency of wheat farmers in Ethiopia," Food Policy, Elsevier, vol. 116(C).
    3. Anthony Cawley & Kevin Heanue & Rachel Hilliard & Cathal O’Donoghue & Maura Sheehan, 2023. "How Knowledge Transfer Impact Happens at the Farm Level: Insights from Advisers and Farmers in the Irish Agricultural Sector," Sustainability, MDPI, vol. 15(4), pages 1-24, February.
    4. Adenuga, Adewale H. & Jack, Claire & Ashfield, Austen & Wallace, Michael, 2022. "Impact of Membership of Dairy Participatory Extension Group on Farm Income: An Application of a Difference-in-Differences Coarsened Exact Matching Approach," 96th Annual Conference, April 4-6, 2022, K U Leuven, Belgium 321170, Agricultural Economics Society - AES.
    5. Balaine, Lorraine & Buckley, Cathal & Dillon, Emma J., 2022. "Mixed public-private and private extension systems: A comparative analysis using farm-level data from Ireland," Land Use Policy, Elsevier, vol. 117(C).
    6. Ngango, Jules, 2022. "Does Women's Empowerment Improve Yields and Income? Evidence from Rice Farmers in Rwanda," Asian Journal of Agriculture and Rural Development, Asian Economic and Social Society (AESS), vol. 12(03), January.
    7. Martinson Ankrah Twumasi & Yuansheng Jiang & Evans B. Ntiamoah & Selorm Akaba & Kwabena N. Darfor & Linda K. Boateng, 2022. "Access to credit and farmland abandonment nexus: The case of rural Ghana," Natural Resources Forum, Blackwell Publishing, vol. 46(1), pages 3-20, February.
    8. Mohammad Mahbubur Rahman & Jeffry D. Connor, 2022. "Impact of Agricultural Extension Services on Fertilizer Use and Farmers’ Welfare: Evidence from Bangladesh," Sustainability, MDPI, vol. 14(15), pages 1-16, July.

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