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Is relaxing equity constraints panacea for Malawi’s green gold expansion? A fuzzy regression discontinuity design approach

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  • Simtowe, Franklin

Abstract

This paper assesses the causal effect of relaxing equity constraints on the cultivation of tobacco in Malawi, a crop viewed by the local population as Malawi’s green gold. Applying the counterfactual outcome framework we find that relaxing equity constraints substantially increases the amount of tobacco land cultivated by smallholder farmers, suggesting that there is scope for increasing tobacco production once equity constraints are relaxed among producers. These findings provide justification for extensive public financing of tobacco production in Malawi.

Suggested Citation

  • Simtowe, Franklin, 2009. "Is relaxing equity constraints panacea for Malawi’s green gold expansion? A fuzzy regression discontinuity design approach," MPRA Paper 17065, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:17065
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    File URL: https://mpra.ub.uni-muenchen.de/17065/1/MPRA_paper_17065.pdf
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    References listed on IDEAS

    as
    1. Yasuyuki SAWADA & Kensuke KUBO & Nobuhiko FUWA & Seiro ITO & Takashi KUROSAKI, 2006. "On The Mother And Child Labor Nexus Under Credit Constraints: Findings From Rural India," The Developing Economies, Institute of Developing Economies, vol. 44(4), pages 465-499, December.
    2. Abadie, Alberto, 2003. "Semiparametric instrumental variable estimation of treatment response models," Journal of Econometrics, Elsevier, vol. 113(2), pages 231-263, April.
    3. Lee, Myoung-jae, 2005. "Micro-Econometrics for Policy, Program and Treatment Effects," OUP Catalogue, Oxford University Press, number 9780199267699.
    4. Diagne, Aliou & Zeller, Manfred, 2001. "Access to credit and its impact on welfare in Malawi:," Research reports 116, International Food Policy Research Institute (IFPRI).
    5. Guido W. Imbens & Donald B. Rubin, 1997. "Estimating Outcome Distributions for Compliers in Instrumental Variables Models," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 64(4), pages 555-574.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    tobacco; equity constraints; counterfactual; treatment effect; Malawi;
    All these keywords.

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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