No. 369

October 2012

Vol XIIIC

ISSN 0019-5170

The Indian Journal of
Economics
 

University of Allahabad

Contents


Households Cassava Consumption
Pattern in Ogun State

Awoyemi T. T.1 and Amao J. 0.2


This study determined urban households cassava consumption pattern in Ogun State. The research objectives were to assess cassava consumption pattern of households and to identify the factors that influenced the consumption pattern as well as the own- and cross-price elasticities of demand for cassava food products. A multistage sampling procedure was employed in selecting 120 household heads. Descriptive statistics, regression analysis and the Almost Ideal Demand System (AIDS) model were the analytical techniques employed.

Most household heads were male, educated young adults between 30 to 39 years of age and were low income earners. The low income earned by household heads with 4 to 6 family members, led to increase consumption of cassava food products. Expensive food items were affordable mostly by respondents with a budget share of N 15, 000 and above on food items. The demand for food increases with rising income while consumption of starchy food staples fell as income rises. The result showed that gender, marital status, household size, employment status and total expenditure of household influences household cassava consumption pattern. The size of household was significant at 10% with a direct relationship on the budget share of fufu with a value of 2.65. Also, total food expenditure has a negative relationship on the budget share of cassava food products. Total expenditure of households on the budget share of fufu was significant at 1% while the budget share of lafun and gari were not significantly related to total expenditure. The demand for cassava food products by households was as a result of the low price but as price increases their demand fell. Households demand for lafun is to substitute gari while the demand for gari was to complement fufu. However, teh demands had different elasticities. For lafun, the demand showed price-inelastic, gari has both price-elastic and unitary elasticity and fufu; price-elastic demand.

  1. Department of Agricultural Economics, University of Ibadan, Nigeria.
  2. Department of Agricultural Economics and Extension, LAUTECH, Ogbomoso, Nigeria.

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Interest Rates, Output Pricing, Loan
Repayments in Agricultural
Inter (De-) Linkages:
A Comparative Study

Giribabu, M. 1


This paper explore to assess the consequences/effects of various credit related interlinkages through examining the variation of interest rates, output pricing and loan repayment condition in different crop regions in Andhra Pradesh and Tamil Nadu. The data collected from eight villages covers four crops during the crop year 2004-05 and the analysis discusses the nature of interlinkages and the individual behavior. The evidences shows that wide variations on interest rates output pricing and loan repayment across the crops and farm groups between the linked and non-linked contracts in both the States. The weaker parties (Marginal and small farmers) are highly exploited by the stronger parties (landlords, money lenders and commission agents) extracting in the name of default risk charged higher interest and providing lower prices and proved that the Marxist approach that the interlinkage is a survival strategy for weaker parties and it is compulsive involvement in market transaction to meet their subsistence needs rather than efficiency or social welfare of the parties.

  1. Assistant Professor, Department of Economics, Nagaland University, Lumami-798627
    E-mail: girihcu@gmail.com

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Spectral and Time Domain Analysis of
Unanticipated Real Exchange Rate,
Inflation Differential and
Real Trade Balance

Kanchan Datta1 and Chandan Kumar Mukhopadhyay2


Countries real exchange rate is the relative price of domestic output in terms of foreign output. Transition from fixed to floating exchange rate regimes are accompanied by sharp increases in real exchange rate variability without corresponding changes in the variability of fundamental macro economic variables. Many studies show that substantial and persistent variation of real exchange rates can not be explained by macro economic fundamentals such as money and income growth and changes in interest rates. A number of models, particularly those relying on purchasing power parity, suggest that exchange rate forecast errors result from errors in forecasting inflation rates. Dornbush (1980) holds that unanticipated changes in the current accounts balance explain a good deal of unanticipated variations in the real dollar-yen exchange rates and less of the unanticipated variations in the real dollar-mark exchange rate during the floating rate period. Hooper and Morton(1980) find that variation in real exchange rate are caused in about equal parts by monetary shocks, current account shocks and changes in the deviation of the actual rate from equilibrium. This paper seeks to investigate whether the Rs/$ US exchange rate forecast error is due to real shock or nomial shocks? Or in other words the viability of the simple asset or monetary models of exchange rate determination by ignoring any real shocks.

  1. Reader, Department of Economics, University of North Bengal.
    E-mail: kanchan.datta@gmail.com
  2. Professor, Department of Economics, University of North Bengal.
    E-mail: mukhopadhyayck.econ@yahoo.com

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An Empirical Analysis of Production,
Prices and Profitability of Cotton in India

R. V. Ramana Murty1 and A. Sailaja2


Issues relating to cotton production continue to draw attention of economists for various reasons. Cotton is news of late for India's level of cotton production is breaking all its past records in the last two decades. It is also a crop that caused severe distress to the farmers in recent times in several states, particularly in dry lands of the country. Cotton crop involves interests of industry and agriculture, which are conflicting to an extent: industry needs stable growth of output at cheaper price and farmers need remunerative price for a stable return. When policy mediates the conflicting interests, where market determined outcomes could be worse, there is a need for a greater clarity over the determinants of supply and prices. It is important to underscore the point that cotton cultivation has to be remunerative in the long run if at the production to grow comfortably in the long run. The present paper is an exercise in such context, to understand the determinants of output and prices, and discuss the policy imperatives.

  1. Associate Professor, Dept of Economics, School of Social Sciences, University of Hyderabad.
    E-mail: rvramana66@gmail.com
  2. Research Scholar, Centre for Planning and Economic Studies.
    E-mail: sailajaalamanda08@gmail.com

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Willingness to pay for Improved Piped
Water Supply: Evidence from Urban
Areas of Hooghly in West Bengal

Maniklal Adhikary1 and Samrat Chowdhury2


This paper aims at bringing out the factors responsible for motivating a household to pay for improved piped water supply. The study tries to integrate the factors responsible for willingness to pay (WTP) with the underlying psychological concept of mental accounting for a better understanding. The study finds a number of factors responsible for willingness to pay for uninterrupted 24 hours piped water supply. The households presently are already incurring a substantial coping cost in order to be able to use water for 24 hours. We suggest therefore, that conscious efforts must be made by Government and water utilities to extract the coping cost, and use the revenue so earned, in order to improve continuous fresh piped water supply.

INTRODUCTION

A study pertaining to willingness to pay for water services, though quite common, is an extremely difficult study to execute in developing countries. Though studies on willingness to pay (WTP) are quite methodlogical, yet its implementation at the ground level is quite difficult. A researcher has to dear with many pratical difficulties while designing questionnaire and conducting survey. The low literacy rates, the prejudice that Goverment should provide water free of cost and to add to that many unresponsive households in survey are some noteworthy obstacles to mention that prevents the precise implementation of a study.

However, such studies are important to execute because revenue earning of water utilies are low and insufficient to cover cost of provision of such services in developing countries Whittington (2003, 2010). Assessment of willingness to pay for improved water service is perhaps the first step towards improving both the revenue earning of water utilities as well as better provision of water services to household.

  1. Professor in Economics, University of Burd wan, Golapbag, West Bengal, India.
    E-mail: adhikaryjnaniklal@yahoo.com
  2. Assistant Professor in Economics, Taki Govt College, West Bengal India.
    E-mail: hi_samrat@rediffmail.com

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Budgetary Allocation In Water Supply
and Sanitation Services:
Some Perspectives

C. Bhujanga Rao1 and D. K. Srivastava2


This paper looks at the budgetary allocations and analyzes the inter-state imbalances in water supply and sanitation over the period 1993-94 to 2008-09 covering 28 states. The states are classified into general category and special category states. The GSDP analysis of the 28 states shows that middle income states like Andhra Pradesh, Karnataka, Kerala and Tamil Nadu have performed better in terms of their growth rates. In terms of per capita expenditure on water supply and sanitation Uttar Pradesh was the lowest and in general there is an increase in the extent of disparity. The coefficient of variation for the general category states has varied between 60-73 percent and special category states between 48-76 percent The performance of states in terms of capacity and priority ratio shows that low income states like Bihar and Madhya Pradesh are below the 16-states average.

  1. Faculty, National Institute of Public Finance and Policy, 18/2 Satsang Mihar Marg,
    Special Institutiona Area, New Delhi 110 067.
    E-mail: cbr7rao@hotmail.com
  2. Director, Madras School of Economics, Gandhi Mandapam Road, Behind Government Data Center, Kottur Chennai, Tamil Nadu, India - 600 025.
    E-mail: Srivastava@mse.ac.in

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Projection of Land Utilization Pattern
in Eastern Uttar Pradesh, India:
A Markov Chain Approach

Mahendra Singh1


The study examines the structural changes in land utilization pattern and shifting of area among different land use classes. Area shares are projected for the years 2010 and 2020 for eastern Uttar Pradesh, using Markov chain analysis and compared with Uttar Pradesh and India. Decadal changes in the share of land use classes and land use ecological groups estimated for the period 1950-51 to 2005-06. Indicate that die area under non-agricultural uses, current fallows and net sown area has increased significantly, while the area under barren land, waste land and miscellaneous tree classes has declined in Eastern Uttar Pradesh, Uttar Pradesh and India during entire period of study. The area under desirable ecological groups has declined in Eastern Uttar Pradesh and Uttar Pradesh, but showed constant trend at India level. The projection of different land use classes and the groups indicated that the area under agricultural sector would stagnate while area under non-agricultural uses would increase significantly by 2010 and 2020 in Eastern Uttar Pradesh, Uttar Pradesh and at India level. The increase in area under non-agricultural uses in Eastern Uttar Pradesh will come from agriculture sector (over one percent), in Uttar Pradesh from desirable ecological sector (over 9 %), and at India level from agricultural sector (over 5%). The shift in area from agriculture and ecological sectors to non-agricultural sector needs to be arrested through perspective land use planning as this has negative implications for food security and agricultural sustainablility.

  1. Senior Technical Officer, Division of Agricultural Economics,
    Indian Agricultural Research Institute, New Delhi.
    E-mail: mahendrasingh582005@yahoo.com

Copyright 2013, The Indian Journal of Economics
University of Allahabad