Human Capital, Culture, Markets Access and Productive Inefficiency in a Diversified Open Economy—Empirical Evidence from Rural Haiti

Type Working Paper
Title Human Capital, Culture, Markets Access and Productive Inefficiency in a Diversified Open Economy—Empirical Evidence from Rural Haiti
Author(s)
Publication (Day/Month/Year) 2008
URL https://sta.uwi.edu/nlc/2008/documents/papers/SirLewisPaper_ SJacob.pdf
Abstract
Haiti is the most open economy in the Caribbean Region. Trade liberalization policy was adopted therein between
1986 and 1996, and negatively impacted the agricultural sector (Jacob 2002, 2003, 2004, 2008) which is still very
important in the economy—providing 25% of Gross Domestic Product (GDP), 50% of total employment, 46% of total
food requirements of the population, and (to a lesser extent) 5.5% on total exports (compared with 50% in 1980 and
10% in 1990). Using a unique primary cross sectional data set of 815 household farms—collected in 2006—, We
estimate productive efficiency under non parametric Constant Return to Scale (CRS) DEA (Data envelopment
analysis) model (Jacob 2008). Inefficiency scores were then measured as deviation from the best practices frontier
(Featherstone, Langemeier, and Ismet 1997), and model, using Tobit procedures (McDonald and Moffitt 1980;
Maddala 1983), the determinants that are linked with. We first show the causal role of cultural beliefs and religious
practices on farmers’ efficiency. After controlling for a set of exogenous variables, the findings show the crucial role
human capital as an asset for increasing efficiency while market access difficulties, and slow-moving cultural
practices inherited from previous generations have a negative impact. In order to quantify the impact on technical
efficiency of changes in the explanatory variables, the estimated coefficients (the total effects) are decomposed in: (i)
the conditional variation in uncensored values of inefficiency themselves, and (ii) the variation in the probability of
the dependent variable to fall in the uncensored part of the distribution (MacDonald and Moffitt 1980; Roncek 1992).
Policy makers should pay attention to factors associated with inefficiency for poverty alleviation interventions.

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