Sandeep Mohapatra

How Reliable Are Hog Futures as Forecasts

The Chicago Mercantile Exchange hog futures contract was revamped in 1997 and it is one of the largest futures markets for a nonstorable commodity. The literature is divided on whether or not futures prices for nonstorables provide reliable forecasts of cash prices. We find that from 1998 to 2004, the hog futures market was an unbiased predictor of cash prices. Copyright 2008, Oxford University Press.

Interactions Between Incentive Instruments: Contracts and Quality in Processing Tomatoes

Contracting and other forms of vertical coordination are important parts of the supply chains for many agricultural products. Often the buyer cares about multiple product attributes affected by a growers actions. Using data that are insulated from common methodological problems, we test whether or not price incentives for two processing tomato quality attributes exhibit complementarity in improving delivered quality. Price incentives for the two attributes are substitutes for the provision of one and complements for the other. This finding has consequences for the profit-maximizing choice of incentive instruments for processors, and contributes to the literature regarding tests for complementarities. Copyright 2010, Oxford University Press.

Climbing the development ladder: Economic development and the evolution of occupations in rural China

Abstract We study how occupations evolve across space and time during the development of an economy. Using a data set on more than 200 villages from 8 provinces in China, we examine the main occupations that have characterised Chinas labour markets since the economic reforms. Our findings reveal a systematic evolutionary pattern of occupational emergence: the evolution of occupations proceeds from traditional and fairly simple forms of subsistence agriculture to modern, more complex manufacturing and service firms. Our findings suggest that rural development in China is being built by a process that can be described by the climbing of a development ladder with each step up the ladder denoting the economys transition into a more complex occupational regime.

Effects of Forward Sales on Spot Markets: Pre-commitment Sales and Prices for Fresh Strawberries

Increasingly, agricultural markets are vertically coordinated. Often a thinning spot market coexists with coordinated transactions, raising the question of how private coordination affects the market as a whole. One of the greatest challenges when analyzing such market-level effects is obtaining information on private transactions. We utilize publicly available data to evaluate how informal contracts in the fresh strawberry market affect spot market prices using a generalized autoregressive conditional heteroskedastic in mean (GARCH-M) model. We find that these informal contracts increased spot prices, as argued by some industry members, while the effect on spot price volatility varied by production region.

Impact of Community-Based HIV/AIDS Treatment on Household Incomes in Uganda

Though health benefits to households in developing countries from antiretroviral treatment (ART) programs are widely reported in the literature, specific estimates regarding impacts of treatments on household incomes are rare. This type of information is important to governments and donors, as it is an indication of returns to their ART investments, and to better understand the role of HIV/AIDS in development. The objective of this study is to estimate the impact of a community-based ART program on household incomes in a previously underserved rural region of Uganda. A community-based ART program, based largely on labor contributions from community volunteers, was implemented and evaluated. All households with HIV/AIDS patients enrolled in the treatment programme (n = 134 households) were surveyed five times; once at the beginning of the treatment and every three months thereafter for a period of one year. Data were collected on household income from cash earnings and value of own production. The analysis, using ordinary least squares and quantile regressions, identifies the impact of the ART program on household incomes over the first year of the treatment, while controlling for heterogeneity in household characteristics and temporal changes. As a result of the treatment, health conditions of virtually all patients improved, and household incomes increased by approximately 30% to 40%, regardless of household income quantile. These increases in income, however, varied significantly depending on socio-demographic and socio-economic control variables. Overall, results show large and significant impacts of the ART program on household incomes, suggesting large returns to public investments in ART, and that treating HIV/AIDS is an important precondition for development. Moreover, development programs that invest in human capital and build wealth are important complements that can increase the returns to ART programs.

REMOVING THE “VEIL OF IGNORANCE”: NONLINEARITIES IN EDUCATION EFFECTS ON GENDER WAGE INEQUALITIES

A large literature studies the mean gender wage gap in developing countries and finds mixed evidence about the role of education policies in closing gender earnings inequalities. We contribute to this literature by exploring two types of nonlinearities in wage earning regressions: (1) nonlinearities on the effects of education on expected earnings along the distribution of education endowments; and (2) heterogeneities on the contributions of education to the gender wage gap at different quantiles of the wage distribution. Our analyses provide new insights on how these nonlinear effects can be used to set up better targeted gender and development policies. (JEL I26, C14)

Reconsidering Post Green Revolution Food Choices: New Processing Technologies and Food Security in India

Though the Green Revolution has played a large role in producing food for increasing populations, the mass production of calories has come with costs. For example, varieties of finger millet (Eleusine coracana, known in India as ragi), which have largely been replaced during the Green Revolution, are generally more nutritious than high yielding varieties of cereals such as rice, maize, and wheat (National Research Council, 1996). Before being consumed, ragi must be ground into flour, and the drudgery associated with the preparation of this grain for consumption could be prohibiting ragi production amongst subsistence farmers (Finnis, 2009). To help promote the consumption of ragi flour, scholars have advocated the introduction of innovations in processing ragi for small and large-scale entrepreneurs (e.g., Singh and Raghuvanshi 2012). Recently, small-scale flourmills have been introduced into rural villages by the M.S. Swaminathan Research Foundation with the goal of reversing the decline in local ragi consumption and improving food security amongst households in the community that are disadvantaged and have lower levels of wealth. The establishment of these mills was facilitated by entrepreneurial Self-Help Groups (SHGs). This intervention provides us with an opportunity to investigate the introduction of a new technology, facilitated by SHGs. The objective of our research is to investigate the determinants that drive households‟ use of ragi processing technology. We investigate these determinants using a unique primary dataset, collected from 575 households in rural Tamil Nadu in 2012. Spatial (GIS) techniques were used extensively in our sampling plan and analysis. We employ a two-stage technology adoption framework as a basis for analyzing two key decisions made by the household regarding the production of ragi flour: 1) whether or not to adopt the processing technology (the adoption equation), and – conditional upon adoption – 2) how much ragi flour to produce (the intensity equation). This approach allows us to address a number of key policy questions: Is ragi flour a “poor-person‟s food” (i.e. an inferior good, as suggested by social stigma), or is it a normal good? How do demographic factors affect the adoption and intensity of use of this technology? What are the effects of the prices of ragi grain, ragi flour, and wheat flour on the adoption and intensity decisions? How do the travel costs of accessing these mills affect household‟s decision to adopt the milling services? In analyzing these questions, we pay attention to potential selection biases in adoption caused by unobserved variables. We explore whether the effects of these unobserved variables are consistent with increasing or decreasing welfare. We find that the mills are systematically being placed in close proximity to wealthier households, despite evidence that disadvantaged households have a higher propensity to adopt this technology.

Regulation of local governments and enterprise formation in rural China

With the rise of the private sector in rural China, power has been shifting from the hands of local government officials to the hands of entrepreneurs. In this situation, economic theory offers two opposing predictions regarding how local governments will react to the attrition of power: the economic losers hypothesis (local governments will resist change because it threatens their economic rents) and the helping hand hypothesis (incentives of local government are aligned with the change, limiting resistance). We econometrically test the two hypotheses using a nationally representative sample of data on almost 2500 villages in rural China. Our findings provide strong support for the economic losers hypothesis – local governments resist competition that emerges with the rise of private firms using discriminatory regulation. Our findings suggest that entrepreneurial policies that encourage an impartial regulatory environment for different types of enterprises in rural China may have long run efficiency implication for Chinas economy. However, left on their own, local governments may not have an incentive to promote such reforms.