Browsing by Author "Admassie, Assefa (Dr.)"

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    The Behaviors and Dynamics of the Real Exchange Rate of the’ Birr’ After the Economic Reform
    (A.A.U, 2005-06) Demeke, Tamiru; Admassie, Assefa (Dr.)
    The paper adopts a single equation approach to examine the real exchange rate behavior and exchange rate misalignment after devaluation and foreign exchange I' ate liberalization. The paper finds that real exchange rate and the macroeconomic fundamentals affecting real exchange rate are co integrated. It also shows that devaluation, foreign exchange market liberalization and some of the policy measures taken by government such as reducing government consumption and deficit, new investment policy and other measures that increase the capital il'iflow narrow the gap between the parallel market foreign exchange rate and the official market foreign exchange rate, make the behavior of the real exchange rate fairly variable. In other words, the misalignment of the real exchange rate declines and the exchange rate movement becomes more stable. These are the desired goals that could be achieved by the devaluation of the exchange rate and through foreign exchange rate liberalization.
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    The Effect of Tenure Security and Land Fragmentation on Productivity and Investment in Smallholder Agriculture: Evidence from Tiyo Woreda, Arsi, Ethiopia
    (A.A.U, 1998-05) Teklu, Amare; Admassie, Assefa (Dr.)
    Heavy state intervention over rural lands, lack of established legal and institutional framework to access, use and transfer land has ca u se d land tenure insecurity in Ethiopia. At the same time, population pressure, periodic land redistribution and inheritance practices led to subdivision of holdings as the number of young landless farmers grew up with no alternative off-farm employment opportunity. Despite the prevalence of the problem, there have not been rigorous empirical investigations that explicitly address the issue of tenure insecurity and land fragmentation in relation to agricultural productivity in Ethiopia. This study is undertaken to investigate whether the existing land tenure system in Ethiopia affects farm productivity and resource management practices . Specifically, it tests the general hypothesis that tenure insecurity and fragmentation of holdings undermine productivity and discourage land improvements. Based on a household survey data from Arsi, the study has supported the proposition that land tenure insecurity and fragmentation have significant effect on productivity and land improving investments. Though the study does n ot provide evidence to support t he direct impact of tenure insecurity on Input application , the results implied that the disincentive effects of tenure insecurity on land improvements could contribute t o lower productivity of land in the long-term. Fragmentation of holdings, on the other hand, is found to undermine productivity directly by affecting the management of farming operations as well as through its negative effect on input u se. The study also found that land fragmentation discourages farmers' incentive to manure their fields.
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    The Impact of Agricultural Extension on Maize Production: A Case Study of Sasakawa Global-2000 Extension Project in Bako Area
    (A.A.U, 1998-06) Tadesse, Beyene; Admassie, Assefa (Dr.)
    The SG 2000 extension project has been disseminating improved maize technologies, among others, to achieve its objective of improving farm productivity and thereby increasing food grain production. However, the SG 2000 project may not be special to weakness and constraints that the previous extension approaches were faced with. Thus, this thesis has attempted to identify determinants of extension participation, and to evaluate the impact of the SG 2000 extension project on maize production by examining the level of awareness, adoption, and the increment in productivity and profitability attained using the improved maize production in the Bako area. The Probit model and the Two-Stage Switching Regression approach were employed in the analysis using data collected from 225 sample farm households. ~ It has been found out that proximity to the main road, number of oxen owned, total farm size owned, education level of the household head and availability of credit for down payment significantly affected farms decision to participate in the SG 2000 extension activities significantly high number of both the extension participant and non- participant sample farmers have been aware of the improved maize technologies. However, while almost all the sample extension participating farmers adopted the improved maize technologies, only 10% of the sample non-extension participating farmers adopted. The analysis showed that using the improved maize technologies is much more productive as indicated by the higher elasticity coefficients and the marginal products of the inputs. The increment in productivity (gross benefit) resulted from the extension program has been estimated to be 37. 25 quintals of grain maize per hectare. Considering different scenarios of cost for the improved practices the net benefit for the SG ranges from 726.46 to 1267.48 Birr per hectare, and accordingly the MRR ranges from 36% to 213%. On the other hand, the net benefit for the NSG from the traditional practices is only 385.60 Birr per hectare. Nevertheless, many technical and policy problems have been identified affecting the sustainability of the adoption and the incremental productivity of the improved maize technologies. Therefore, the use of the improved maize technologies and the net benefit exhibited by the adopters may be for the short-run and lo may be limited to benefit only few farmers. Thus, the challenge remains with how to accelerate the adoption and maintain the productivity level of the improved maize technologies on a sustainable base. In this regard, subsidizing and facilitating credit services, output price support, encouraging intra-regional trade, improving input supply, promoting the development of infrastructure and encouraging further research to develop streams of improved seeds are suggested.
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    The Impact of Education on Allocative and Technical Efficiency of Farmers: The Case of Ethiopian Small Holders
    (A.A.U, 1997-06) Asfaw, Abay; Admassie, Assefa (Dr.)
    With the growing interest in human capital theory, analyzing the impact of education on efficiency has been given special emphasis. this study first testes the celebrated hypothesis that 'traditional farmers are efficient but poor'. the result of the stochastic profit frontier function does not support this hypothesis in the Ethiopian case. the result shows that there are considerable amount of deviations from the optimal profit efficiency level. it specifically shows that the mean level of profit efficiency in the sampled fanners is 54.0 percent. this implies that there is 46.0 percent profit inefficiency in the sampled farmers. next it is tried to test the hypothesis of equal allocative and technical efficiency of educated and illiterate farmers by using the modified Y-L profit function model under various linear restrictions. the results reveal that educated farmers are relatively and absolutely more efficient than illiterate fanners. this implies that at the existing level of factor endowments and technology there is a potential to increase agricultural output by expanding education and consequently by making illiterate farmers to operate closer to the efficiency level achieved by their educated neighbors. It is also shown that education increases not only the efficiency of farmers but also the probability of farmers to adopt improved inputs such as fertilizer. the multinomial probit analysis also shows that education and environment variables are substitutes in modem areas and complementary in traditional environments. this suggests that expansion of schools and increasing enrollment rates in rural areas have higher payoff than in modem areas at least in increasing the probability of farmers to adopt fertilizer input.
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    Output Growth, Money Supply and Inflation in a War-torn Economy: Evidence from Sierra Leone
    (A.A.U, 1996-06) Kamara, Alimamy; Admassie, Assefa (Dr.)
    Using annual time series data from 1966 to 1994 f or a war-ravaged economy like Sierra Leone, the paper attempts to establish, via the direct Granger approach, a relationship between money and output on the one hand, and between each of these macroeconomic variables and prices on the other. From the econometric results, it is apparent that a positive feedback relationship exists between money growth and inflation, while a one-way causal relation exists between output growth and inflation with the strand of causation running from output to prices. It is suggested that the feedback which occur between money growth and inflation is attributable to the lags in revenue collection which allow the government to prompt the monetary authorities to create further money. The additional money created results in excess demand and a rise in general prices of goods and services. Consequently, this rise in general prices leads to increased fiscal deficits which the government finance by creating additional money. In addition, output growth granger-causes money growth and money growth granger-causes output growth in the economy. The later, however, occurs without a definite pattern indicating a divergence between the results of this study and those obtained by Barro (1978). Apart from investigating the casual relation among output, money and prices, this paper also examines the behavior of these macroeconomic variables with the aid of the Engle-Granger (1987) two-step estimation procedure. The effect of unanticipated money growth on output growth in the long-run and short-run was also considered in the analysis. Our findings with regards to the effect of unanticipated money growth on output do not lend support to Barro's (1978) claim that output increases with an increase in unexpected money growth. The impact of the rebel war on real output growth and general prices of goods and services was examined via the use of a dummy. From the empirical results it was observed that the rebel war contributes the rising prices of goods and the stifling of real economic activities, albeit insignificantly. The stifling of real economic activities arises from the massive outflow of capital and the collapse of investment activities due to insecurity. Policies which focus on reducing insecurity so as to boost domestic investment and output growth were therefore suggested. With the aid of the DF and ADF tests, this study also attempts to examine the nature of the inflation series in Sierra Leone. T7,e findings suggest that inflation follows a trend-stationary process rather than a difference-stationary process implying that shocks, both domestic and external, have a temporary effect on inflation