Shadow vs. market prices in explaining land allocation: Subsistence maize cultivation in rural Mexico

Aslıhan Arslan

Food Policy, 2011, vol. 36, issue 5, 606-614

Abstract: Prices may fail to explain farmers’ land allocation if the relevant decision prices are “shadow prices” that deviate from market prices. This may be the case for farmers who attach significant non-market values to their crops. I theoretically explain why land allocation may not respond to market signals even if transaction costs are not binding. I use nationally representative rural household data from Mexico to show that shadow prices better explain the land subsistence farmers allocate to traditional maize in this center of maize diversity. I discuss the importance of non-market values in understanding supply response and on-farm conservation of traditional crops.

Keywords: Land allocation; Shadow prices; Non-market values; Traditional crops; On-farm conservation; Mexico (search for similar items in EconPapers)
JEL-codes: O12 O13 Q12 Q15 Q39 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jfpoli:v:36:y:2011:i:5:p:606-614

DOI: 10.1016/j.foodpol.2011.05.004

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