Farmer's health and agricultural productivity in rural Ethiopia

Abstract

ABSTRACT This thesis assesses the impact of farm household’s health on agricultural productivity in Ethiopia. Two years panel data (2004 and 2009) from Ethiopian longitudinal rural household survey (ERHS) are used. First, Cobb Douglas (CD) stochastic frontier analysis is applied to explain the relationship between farm output and inputs. The results indicate most of the major inputs considered such as labour, land soil and fertility influence agriculture production significantly and positively. My major variable of interest, illness is negatively and statistically correlated with agricultural production as expected. Second, technical efficiency score is derived from the CD stochastic frontier estimation model. The results reveal that households exposed to illness have on average 33.5% technical efficiency score, whilst the households not exposed to illness score 48.9%. Thus, this study implies the importance of the quality of the health system to bring about changes in the agricultural production. This is of major interest especially since the Ethiopian economy is mainly agrarian and any factor contributing towards efficiency gains in the sector are of paramount importance.