The Extent of the Market and Stages of Agricultural Specialization

37 Pages Posted: 11 Aug 2007

See all articles by M. Shahe Emran

M. Shahe Emran

George Washington University - Department of Economics

Forhad Shilpi

World Bank - Development Research Group (DECRG)

Multiple version iconThere are 3 versions of this paper

Date Written: April 10, 2007

Abstract

This paper provides empirical evidence of nonlinearity in the relationship between crop specialization in a village economy and the extent of the market (size of the urban market) relevant for the village. The results suggest that the portfolio of crops in a village economy becomes more diversified initially as the extent of the market increases. However, after the market size reaches a threshold, the production structure starts to specialize again. This evidence on the stages of agricultural diversification is consistent with the stages of diversification identified in the recent literature for the economy as a whole and also for the manufacturing sector. The evidence also indicates the existence of a monotonically increasing relationship between the degree of market participation among the households in a village and the extent of the relevant urban market.

Keywords: Structural Change, Agriculture, Crop Specialization, The Extent of the Market, Market versus Home Production, Commercialization

JEL Classification: O12, R11, R12

Suggested Citation

Emran, M. Shahe and Shilpi, Forhad, The Extent of the Market and Stages of Agricultural Specialization (April 10, 2007). Available at SSRN: https://ssrn.com/abstract=1005983 or http://dx.doi.org/10.2139/ssrn.1005983

M. Shahe Emran (Contact Author)

George Washington University - Department of Economics ( email )

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Forhad Shilpi

World Bank - Development Research Group (DECRG) ( email )

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Washington, DC 20433
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202-522-1151 (Fax)

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