IDEAS home Printed from https://ideas.repec.org/p/adb/adbwps/2377.html
   My bibliography  Save this paper

Working Paper 266 - Structural Transformation and Income Distribution: Kuznets and Beyond

Author

Listed:
  • Ravi Kanbur

Abstract

This paper investigates the empirical linkages between production risk and technology adoption decisions among agricultural farmers in Tanzania and Uganda using a balanced household panel dataset from the World Bank’s LSMS-ISA project. Applying a moment-based approach and a Mundlak-Chamberlain IV fixed effects model to control for endogeneity and unobserved heterogeneity, I find that the first four moments of production significantly explain changes in the probability of adopting chemical fertilizer, improved seeds, and pesticides. While the use of these modern inputs is found to be risk-decreasing, estimates suggest that the higher their purchasing costs, the greater the cost of farmers’ private risk bearing. Under the assumption of a moderate risk aversion, the risk premium amounts to 12.7% and 30.5% of the expected production revenues respectively in Tanzania and Uganda, largely explained by production volatility and downside risk aversion. This underscores the need to account for farmers’ preferences towards higher order moments when designing technology adoption policies.

Suggested Citation

  • Ravi Kanbur, 2017. "Working Paper 266 - Structural Transformation and Income Distribution: Kuznets and Beyond," Working Paper Series 2377, African Development Bank.
    • Handle: RePEc:adb:adbwps:2377
    as

    Download full text from publisher

    File URL: https://www.afdb.org/fileadmin/uploads/afdb/Documents/Publications/WPS_No_266_Structural_Transformation_and_Income_Distribution_Kuznets_and_Beyond_Z_.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Kanbur, Ravi, 2012. "Does Kuznets Still Matter?," Working Papers 128794, Cornell University, Department of Applied Economics and Management.
    2. Saavedra-Chanduví, Jaime & Molinas, José R. & De Barros, Ricardo Paes & Ferreira, Francisco H. G., 2009. "Measuring Inequality of Opportunities in Latin America and the Caribbean," IDB Publications (Books), Inter-American Development Bank, number 361, November.
    3. Ravi Kanbur & Xiaobo Zhang, 2005. "Fifty Years of Regional Inequality in China: a Journey Through Central Planning, Reform, and Openness," Review of Development Economics, Wiley Blackwell, vol. 9(1), pages 87-106, February.
    4. Deininger, Klaus & Squire, Lyn, 1998. "New ways of looking at old issues: inequality and growth," Journal of Development Economics, Elsevier, vol. 57(2), pages 259-287.
    5. Ahluwalia, Montek S, 1976. "Income Distribution and Development: Some Stylized Facts," American Economic Review, American Economic Association, vol. 66(2), pages 128-135, May.
    6. Robinson, Sherman, 1976. "A Note on the U Hypothesis Relating Income Inequality and Economic Development," American Economic Review, American Economic Association, vol. 66(3), pages 437-440, June.
    7. Anand, Sudhir & Kanbur, S. M. R., 1993. "Inequality and development A critique," Journal of Development Economics, Elsevier, vol. 41(1), pages 19-43, June.
    8. Yanan Li & Ravi Kanbur & Carl Lin, 2019. "Minimum Wage Competition between Local Governments in China," Journal of Development Studies, Taylor & Francis Journals, vol. 55(12), pages 2479-2494, December.
    9. Ricardo Paes de Barros & Francisco H.G. Ferreira & Jose R. Molinas Vega & Jaime Saavedra Chanduvi, 2009. "Measuring Inequality of Opportunities in Latin America and the Caribbean," World Bank Publications, The World Bank, number 2580, September.
    10. Anand, Sudhir & Kanbur, S. M. R., 1993. "The Kuznets process and the inequality--development relationship," Journal of Development Economics, Elsevier, vol. 40(1), pages 25-52, February.
    11. repec:idb:brikps:60098 is not listed on IDEAS
    12. Ahluwalia, Montek S., 1976. "Inequality, poverty and development," Journal of Development Economics, Elsevier, vol. 3(4), pages 307-342, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zhou, Yixiao & Tyers, Rod, 2019. "Automation and inequality in China," China Economic Review, Elsevier, vol. 58(C).
    2. Diego Martínez-Navarro & Ignacio Amate-Fortes & Almudena Guarnido-Rueda, 2020. "Inequality and development: is the Kuznets curve in effect today?," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 37(3), pages 703-735, October.
    3. Cinar Baymul & Kunal Sen, 2020. "Was Kuznets Right? New Evidence on the Relationship between Structural Transformation and Inequality," Journal of Development Studies, Taylor & Francis Journals, vol. 56(9), pages 1643-1662, July.
    4. Benedicte Dalmeida Ngah Atangana & Henri Ngoa Tabi, 2024. "Technical Education, Vocational Training and Industrialisation in Sub-Saharan Africa(SSA)," Journal of Sustainable Development, Canadian Center of Science and Education, vol. 15(1), pages 1-65, July.
    5. D.P. von Fintel, 2018. "Long-Run Spatial Inequality in South Africa: Early Settlement Patterns and Separate Development," Studies in Economics and Econometrics, Taylor & Francis Journals, vol. 42(2), pages 81-102, August.
    6. Clementi,Fabio & Fabiani,Michele & Molini,Vasco & Schettino,Francesco, 2022. "Is Inequality Systematically Underestimated in Sub-Saharan Africa ? A Proposal toOvercome the Problem," Policy Research Working Paper Series 10058, The World Bank.
    7. Armida Alisjahbana & Kyunghoon Kim & Kunal Sen & Andy Sumner & Arief Anshory Yusuf, 2020. "The developer's dilemma: A survey of structural transformation and inequality dynamics," WIDER Working Paper Series wp-2020-35, World Institute for Development Economic Research (UNU-WIDER).
    8. Jena , Devasmita, 2021. "International Trade, Structural Transformation and Economic Catch-Up: An Analysis of The Asean Experiences," Journal of Economic Development, The Economic Research Institute, Chung-Ang University, vol. 46(3), pages 135-155, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kanbur, Ravi, 2017. "Structural Transformation and Income Distribution: Kuznets and Beyond," IZA Discussion Papers 10636, Institute of Labor Economics (IZA).
    2. Bourguignon, Francois, 2005. "The Effect of Economic Growth on Social Structures," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 27, pages 1701-1747, Elsevier.
    3. Frazer, Garth, 2006. "Inequality and development across and within countries," World Development, Elsevier, vol. 34(9), pages 1459-1481, September.
    4. Temple, Jonathan & Ying, Huikang, 2014. "Life During Structural Transformation," CEPR Discussion Papers 10297, C.E.P.R. Discussion Papers.
    5. Jalil, Mohammad Muaz, 2009. "Re-examining Kuznets Hypothesis: Does Data Matter?," MPRA Paper 72557, University Library of Munich, Germany.
    6. Wei Zou & Yong Liu, 2010. "Skilled Labor, Economic Transition and Income Differences: A Dynamic Approach," Annals of Economics and Finance, Society for AEF, vol. 11(2), pages 247-275, November.
    7. Takahiro Akita, 2024. "Urbanization and Income Inequality," Working Papers EMS_2024_01, Research Institute, International University of Japan.
    8. Kanbur, Ravi, 2012. "Does Kuznets Still Matter?," Working Papers 128794, Cornell University, Department of Applied Economics and Management.
    9. Christopher Hoy & Andy Sumner, 2021. "The End of Global Poverty: Is the UN Sustainable Development Goal 1 (Still) Achievable?," Global Policy, London School of Economics and Political Science, vol. 12(4), pages 419-429, September.
    10. Isaac Ehrlich & Jinyoung Kim, 2007. "The Evolution of Income and Fertility Inequalities over the Course of Economic Development: A Human Capital Perspective," Journal of Human Capital, University of Chicago Press, vol. 1(1), pages 137-174.
    11. Bourguignon, Francois & Morrisson, Christian, 1998. "Inequality and development: the role of dualism," Journal of Development Economics, Elsevier, vol. 57(2), pages 233-257.
    12. Ayal Kimhi, 2004. "Growth, Inequality and Labor Markets in LDCs: A Survey," CESifo Working Paper Series 1281, CESifo.
    13. Krishna Mazumdar, 2000. "Inter-Country Inequiality in Social Indicators of Development," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 49(3), pages 335-345, March.
    14. Joël Hellier & Stéphane Lambrecht, 2013. "Inequality, Growth and Welfare: The Main Links," Palgrave Macmillan Books, in: Joël Hellier & Nathalie Chusseau (ed.), Growing Income Inequalities, chapter 9, pages 274-311, Palgrave Macmillan.
    15. (River) Huang, Ho-Chuan & Lin, Shu-Chin & Suen, Yu-Bo & Yeh, Chih-Chuan, 2007. "A quantile inference of the Kuznets hypothesis," Economic Modelling, Elsevier, vol. 24(4), pages 559-570, July.
    16. Ananya Ghosh Dastidar, 2004. "Structural Change and Income Distribution in Developing Economies: Evidence from a Group of Asian and Latin American Countries," Working papers 121, Centre for Development Economics, Delhi School of Economics.
    17. Kanbur, Ravi, 2000. "Income distribution and development," Handbook of Income Distribution, in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 13, pages 791-841, Elsevier.
    18. Andrés Rodríguez‐Pose & Vassilis Tselios, 2009. "Education And Income Inequality In The Regions Of The European Union," Journal of Regional Science, Wiley Blackwell, vol. 49(3), pages 411-437, August.
    19. Kanbur, Ravi & Wang, Yue & Zhang, Xiaobo, 2021. "The great Chinese inequality turnaround," Journal of Comparative Economics, Elsevier, vol. 49(2), pages 467-482.
    20. Markus Brueckner & Era Dabla Norris & Mark Gradstein, 2015. "National income and its distribution," Journal of Economic Growth, Springer, vol. 20(2), pages 149-175, June.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:adb:adbwps:2377. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Adeleke Oluwole Salami (email available below). General contact details of provider: https://edirc.repec.org/data/afdbgci.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.