Does Fertilizer Use Respond to Rainfall Variability? Panel Data Evidence from Ethiopia

Yonas Alem, Mintewab Bezabih (), Menale Kassie and Precious Zikhali ()
Additional contact information
Mintewab Bezabih: Department of Economics, University of Portsmouth, UK
Precious Zikhali: Department of Economics, School of Business, Economics and Law, Göteborg University, Postal: Box 640, SE 40530 GÖTEBORG

No 337, Working Papers in Economics from University of Gothenburg, Department of Economics

Abstract: In this paper we use farmers' actual experiences with changes in rainfall levels and their responses to these changes to assess if patterns of fertilizer use are responsive to changes in rainfall patterns. Using plot and farm level panel data from the central Highlands of Ethiopia matched with corresponding village level rainfall data; results show that both the current year’s decision to adopt and the intensity of fertilizer adoption is positively associated with higher rainfall levels experienced in the previous year. Furthermore, we find a concave relationship between previous season rainfall levels and fertilizer adoption, indicating that too much rainfall discourages adoption. Abundant rainfall in the previous year could depict relaxed liquidity constraints and increased affordability of fertilizer, which makes rainfall availability critical in severely credit constrained environments. In light of similar existing literature, the major contribution of the study is its use of plot level panel data, which permits us to investigate the importance of plot characteristics in fertilizer adoption decisions.

Keywords: Fertiliser adoption; Rainfall; Highlands of Ethiopia; Panel data (search for similar items in EconPapers)
JEL-codes: O12 O33 Q12 Q16 Q54 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2009-01-05
New Economics Papers: this item is included in nep-afr, nep-agr and nep-dev
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http://hdl.handle.net/2077/18935 (text/html)

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Journal Article: Does fertilizer use respond to rainfall variability? Panel data evidence from Ethiopia (2010)
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