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The Developing Economies

Volume 35, Number 1 (March 1997)

The Developing Economies ■ The Developing Economies Volume 35, Number 1 (March 1997)
■ B5
■ 105pp.
■ Published in March 1997
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Ric Shand and K. P. Kalirajan, "Yamazawa's Open Economic Association: An Indian Ocean Grouping for Economic Cooperation," pp. 3-27.

With the landmark economic reforms in South Asia and political changes in South Africa, several issues concerning trade and investment have emerged within the Indian Ocean region and internationally. Following the concept of "open economic association" introduced by Yamazawa, the question examined in this paper is whether a market-driven economic integration is emerging involving the Indian Ocean Rim countries.

Takashi Kurosaki, "Production Risk and Advantages of Mixed Farming in the Pakistan Punjab," pp. 28-47.

This paper proposes an empirical model of profit variability at the individual farm level and applies it to Pakistan's agriculture. Results show that the addition of idiosyncratic yield shocks and adjustment for input costs lead to a much larger variability of net profits than implied by the variability of average gross revenues--Pakistan's irrigated agriculture is associated with higher profit variability compared with semiarid India. It is also demonstrated that the correlation between green fodder profit and milk profit at the farm level is substantially negative. This negative correlation implies that it is advantageous, in terms of risk diversification, to combine fodder and milk production in one enterprise, which is commonly observed in the mixed farming systems in Pakistan's Punjab.

Boris E. Bravo-Ureta and Antonio E. Pinheiro, "Technical, Economic, and Allocative Efficiency in Peasant Farming: Evidence from the Dominican Republic," pp. 48-67.

This paper presents measures of technical (TE), economic (EE), and allocative (AE) efficiency for a sample of sixty peasant farmers in the Dajabon region of the Dominican Republic. Maximum likelihood techniques are used to estimate a Cobb-Douglas production frontier, which is then used to derive its corresponding dual cost frontier. These frontiers are the basis for obtaining farm level efficiency estimates. The results reveal average levels of TE, AE, and EE equal to 70 per cent, 44 per cent, and 31 per cent, respectively. In a second step analysis, two-limit tobit regression techniques are used to estimate three separate equations where TE, EE, and AE are expressed as functions of the following farm/farmer characteristics: contract farming, agrarian reform status, farm size, schooling, producer's age, and household size.

Jonna P. Estudillo, "Income Inequality in the Philippines, 1961-91," pp. 68-95.

Household income inequality in the Philippines remains high and the trends for three decades have been fairly stable except for a sharp decline in the mid-1980s. Gini coefficient of income inequality has been consistently close to 0.50. Urbanization and education of household head are the most important factors determining the level of income inequality while the contribution of age of head is limited. The increase in the number of urban households results in an increase of overall inequality while the increase in the number of household heads with a college education tends to decrease the inequality. Among the household income sources, wage income is the largest contributor to total income inequality. Wage rate inequality appears to be a major source of wage income inequality.