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Statistical Significance of Indicators of Efficiency and Incentives: Examples from West African Agriculture
Author(s) -
McIntire John,
Delgado Christopher L.
Publication year - 1985
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1241812
Subject(s) - incentive , agriculture , economics , production (economics) , sorghum , variable (mathematics) , econometrics , variables , resource (disambiguation) , natural resource economics , agricultural economics , mathematics , statistics , microeconomics , geography , computer science , forestry , archaeology , mathematical analysis , computer network
Indicators of efficiency and incentives derived from trade theory, such as the domestic resource cost coefficient (DRC) and effective protection (EP), are generally presented as simple means. Analysis of their distributions, using farm data on millet and sorghum production from West Africa, shows them to be highly variable and, in some cases, to be significantly skewed. The analysis also shows the indicators to be highly elastic to changes in such parameters as input and output prices. If this variability is not considered when making inferences from such data, policy recommendations can be seriously misleading because they are based on different farming populations.