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

Simtowe, Franklin (2009): Is relaxing equity constraints panacea for Malawi’s green gold expansion? A fuzzy regression discontinuity design approach.

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: tobacco; equity constraints; counterfactual; treatment effect; Malawi
• Subjects: D - Microeconomics > D1 - Household Behavior and Family Economics > D13 - Household Production and Intrahousehold Allocation; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O33 - Technological Change: Choices and Consequences ; Diffusion Processes; C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C21 - Cross-Sectional Models ; Spatial Models ; Treatment Effect Models ; Quantile Regressions

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