Note: A data appendix for replication of this article's main results is freely available, alongside the electronic version of this article at the publisher's website.
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Linkages between the farm and nonfarm sectors at the household level in rural Ghana: a consistent stochastic distance function approach
Article first published online: 7 JAN 2010
DOI: 10.1111/j.1574-0862.2009.00425.x
© 2010 International Association of Agricultural Economists
Additional Information
How to Cite
Anríquez, G. and Daidone, S. (2010), Linkages between the farm and nonfarm sectors at the household level in rural Ghana: a consistent stochastic distance function approach. Agricultural Economics, 41: 51–66. doi: 10.1111/j.1574-0862.2009.00425.x
Data Appendix Available Online
A data appendix to replicate main results is available in the online version of this article. Please note: Wiley-Blackwell, Inc. is not responsible for the content or functionality of any supporting information supplied by the authors. Any queries (other than missing material) should be directed to the corresponding author for the article.
Publication History
- Issue published online: 7 JAN 2010
- Article first published online: 7 JAN 2010
- Received 31 March 2008; received in revised form 5 April 2009; accepted 21 August 2009
Keywords:
- D13;
- Q12
- Rural nonfarm sector;
- Input distance function;
- Cost complementarities;
- Technical efficiency;
- Ghana
Abstract
This article explores the effects within households of an expanding rural nonfarm (RNF) sector in Ghana. We ask whether the growing RNF sector allows for economies of diversification within farms, how it affects household input demands, and whether it has measurable effects in overall household production efficiency. We explore the intrahousehold linkages between agricultural and RNF activities, first assuming perfectly competitive input and output markets and then with market failures, in particular missing labor and credit markets. We then measure these linkages using a household level input distance function, finding high levels of inefficiency in Ghanaian farms. Also, there are cost-complementarities between the RNF sector and the agricultural sector, particularly with food crops in which the poorest tend to specialize. The expansion of the RNF sector increases demand for most inputs including agricultural land. Finally, we show that smaller farms tend to be more efficient, and that RNF output is helping the farm household to become more efficient, but the latter result is not robust.