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Title: Price Response of Rural Households in Ethiopia: Case of Bako, Yetmen, Tiyo/Eteya
Authors: Feiruz, Yimer
Advisors: Dr. Mulat Demeke
Copyright: 2007
Date Added: 17-Apr-2008
Publisher: Addis Ababa University
Abstract: The study is conducted to assess price response of Ethiopian farm households. For this purpose, a sample of 217 households selected from food crop growing areas is used. The households are modeled using the nonseparable farm household framework for the reason that the households are assumed to face incomplete labor market. The SNQ profit function is estimated to capture the production side of the households where as AIDS function for consumption side. Elasticities are derived from this function and utilized in calculating non-separable household model price elaticities. In addition, to examine the implication of market imperfection, the separable farm household price elasticities are calculated for comparison purpose. The findings show that price response of agricultural production activities are negatively affected by the rise in price of agricultural goods under non-separable framework unlike the separable one. On the other hand, change of fertilizer price in downward direction has positive impact on production and input use. So, the rise in price of agricultural goods is not the right incentive for increasing production. Hence, a more appropriate incentive for production would be a reduction in the price of fertilizer than a rise in price of agricultural goods. The possible policy implication which could be inferred form the analysis is that governments need to have the discretion to provide support in input use, particularly fertilizer, in the form of subsidy so as to initiate rural households to produce more.
Description: A Master’s Thesis Submitted to the School of Graduate Studies Addis Ababa University In Partial Fulfillment of the Requirements for the Degree of Masters of Science in Economics (Economic Policy Analysis)
URI: http://hdl.handle.net/123456789/562
Appears in:Thesis - Economics

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