B028245 - AGRICULTURE, DEVELOPMENT AND POVERTY

English

Policy impact evaluation, Demand analysis, Profit function, Agricultural supply response, Food security, Farmer behavior and welfare under risk, Agricultural household models, Partial equilibrium analysis of price distortions, Sectoral impacts of macroeconomic policies, Real exchange rate, Transaction costs and agrarian institutions, Input-output tables, Social accounting matrices, Computable general equilibrium models.

Sadoulet, E., and de Janvry, A., 1995. Quantitative Development Policy Analysis. Baltimore: The Johns Hopkins University Press.
de Janvry, A., and Sadoulet, E., 2016. Development Economics. Theory and Practice. London: Routledge.

Knowledge and comprehension of theoretical models and analytical approaches for the quantitative analysis of development policy impact on poverty and food security in rural areas in LDCs.
Ability to apply knowledge and comprehension.

The course consists of two types of activities:
a) lectures: 22 lectures of two hours each (total 40 hours), and
b) case studies: 5 homeworks on datasets provided by the instructor every other week and reports (to be prepared in groups of no more than 3-4 students) on the impacts of policy interventions using datasets provided by the instructor.

The lecture handouts and all relevant materials can be downloaded from the course website on the Moodle e-learning platform.

The course website on the Moodle platform provides also a direct link to Webex platform for lecture videostreaming or downloading recorded lectures.

In order to have access to the course website on the Moodle platform, students are required to:
a) first, access the Moodle e-learning platform (http://e-l.unifi.it/login/index.php), and
b) then access the course website on the Moodle platform.

The access to Moodle does not require any password for UNIFI students.

Incoming students who do not have yet an UNIFI account can request the password to access the course website, writing an email to the lecturer (donato.romano@unifi.it).

Lectures, homeworks and reports are meant as coordinated components of the course and jointly contribute to the student evaluation mechanism.

The evaluation mechanism considers the following items:
- AP: attendance and participation to class;
- HW: homeworks and reports on case studies;
- MT: mid-term exam, on the contents of the course first half (lectures 1 to 10);
- FI: final exam, on all course contents (lectures 1 to 20).

Both the mid-term and the final exam are written exams.

In the case the final exam grade is lower than the mid-term grade, the overall grade is a weighted average of the above items according to the following formula:

GR=0.05AP+0.30HW+0.25MT+0.4FI

where, GR overall grade,
AP attendance and participation,
HW homeworks and reports,
MT mid-term exam,
FI final exam.

In the case the final exam grade is higher than the mid-term grade, the overall grade is computed according to the following formula:

GR=0.05AP+0.30HW+0.65FI

1. Introduction to quantitative development policy analysis
• Course presentation
• The role of quantitative policy analysis
• Criteria for policy evaluation: welfare and feasibility
• The role of modeling


2. Policy impact evaluation
• The policy process and the role of policy evaluation
• Causal inference and counterfactual
• Experimental design and randomization
• Matching
• Difference in difference


HW1: Impact of female participation to microcredit program on household consumption in Bangladesh

3. Demand analysis (I):
• The basic theory of consumer behavior
• Demand analysis
• Separability and stepwise budgeting
• Engel functions

4. Demand analysis (II):
• Estimation of price elasticities from cross-sectional data
• Estimation of complete demand systems: LES, AIDS, GAIDS
• Effects of household characteristics
• Policy implications

5. The profit function approach (I): factor demand
• The basic theory of production
• Examples of profit functions
• Derived systems of output supply and factor demand
• Cost function and systems of factor demands

6. The profit function approach (II): output supply
• Short-run vs. long-run supply response
• Aggregate supply response

7. Supply response
• Alternative approaches to the measurement of supply response
• Nerlovian models of supply response
• Examples of Nerlovian models

8. Supply response
• Limits and extensions of Nerlovian models
• Producer response to lagged prices (cobweb models) and market dynamics
• Alternative expectation models

HW2: Supply response for groundnuts in Sub-Saharan Africa

9. Food security
• Definitions and levels of analysis
• Alternative approaches to food security analysis
• Food production and food security: the role of agriculture
• Trade and food security
• Methods for measuring food security

10. Farmer behavior and welfare under risk
• Technical and economic features of agricultural production processes
• Risk modeling in production economics
• Measuring the cost of risk
• Household response to risk
• Market integration and price stabilization

11. Agricultural household models
• Household behavior and policy analysis
• Producer problem
• Consumer problem
• Worker problem
• Household problem
• Specification of a household model

12. Agricultural household models
• Separable household models with perfect markets
• Non-separable household models with market failures
• Calibration and simulations

HW3: Household response to price incentives

13. Price distortions: partial equilibrium analysis
• Reference prices
• Indicators of protection and incentives
• Indicators of comparative advantages

14. Price distortions: partial equilibrium analysis
• Partial equilibrium analysis of price distortions
• Distortions on tradables
• Distortions on non tradables
• Multiple interventions

HW4: Effects of price distortions and investment in research on efficiency and welfare in Argentina

15. Effects of macroeconomic policies
• Stabilization and structural adjustment: impacts on rural households
• Exchange rate policy
• Fiscal policy
• Monetary policy

16. The real exchange rate
• Market and effective exchange rates
• The equilibrium exchange rate
• Forces affecting the real exchange rate
• Impact of trade distortions on the real exchange rate

HW5: Exchange rate and trade policies in Pakistan

17. Transaction costs and agrarian institutions
• Efficiency: definitions and measurement
• Technical change and productivity growth

18. Transaction costs and agrarian institutions
• Efficiency and productivity under transaction costs
• Household behavior under transaction costs
• Transaction costs and institutional solutions: sharecropping

19. Input-output tables
• Structure of an input-output table
• The input-output model: equations
• Interpretation and extensions
• I-O multipliers

20. Social accounting matrices
• SAM structure
• Construction of a SAM: data requirements
• SAM multipliers
• Interpretation and extensions

HW6: Input-output and SAM multipliers in Morocco

21. CGE models (I)
• Structure of CGE models
• Agents’ behavior and market equilibrium
• The macroeconomics of CGE models
• Foreign trade and the real exchange rate
• Labor market

22. CGE models (II)
• Construction of a CGE model
• Flow chart and functional specifications
• Data requirements
• Closure rules
• Exogenous variables