Subsidies and Crowding Out: A Double‐Hurdle Model of Fertilizer Demand in Malawi
Abstract
This article uses a double‐hurdle model with panel data from Malawi to investigate how fertilizer subsidies affect farmer demand for commercial fertilizer. The article controls for potential endogeneity caused by the nonrandom targeting of fertilizer subsidy recipients. Results show that on average 1 additional kilogram of subsidized fertilizer crowds out 0.22 kg of commercial fertilizer, but crowding out ranges from 0.18 among the poorest farmers to 0.30 among relatively nonpoor farmers. This indicates that targeting fertilizer subsidies to the rural poor is likely to maximize the contribution of the subsidy program to total fertilizer use.
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- Authors
- Ricker-Gilbert, J., Jayne, T. S., & Chirwa, E.
- Affiliations
- Michigan State University (US)
- University of Malawi (MW)
- Corresponding author
- Ricker-Gilbert, Jacob
- Venue
- American Journal of Agricultural Economics
- Publisher
- Wiley
- Published
- 2011-01
- Volume
- 93
- Issue
- 1
- Pages
- 26-42
- ISSN
- 0002-9092 (ISSN-L)
- 1467-8276
- OpenAlex
- W2163225592
- Cited by
- 402
- References
- 0
- Citations by year
- 2026: 8 · 2025: 13 · 2024: 26 · 2023: 21 · 2022: 23 · 2021: 28 · 2020: 23 · 2019: 24 · 2018: 31 · 2017: 28 · 2016: 33 · 2015: 23 · 2014: 32 · 2013: 58 · 2012: 20
- FWCI
- 142.04
- Type
- journal article
- Language
- en
- Open access
- closed
- Locations
- American Journal of Agricultural Economics (publishedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- Funders
- United States Agency for International Development
- Michigan State University
- Flinders University
- Topics
- Life Sciences › Agricultural and Biological Sciences › General Agricultural and Biological Sciences › Agricultural Innovations and Practices
- Life Sciences › Agricultural and Biological Sciences › General Agricultural and Biological Sciences › Agricultural Economics and Practices
- Social Sciences › Safety Research › Agricultural economics and policies
- Keywords
- fertilizer subsidies, crowding out, fertilizer demand, double hurdle model, targeted subsidies, rural poverty, smallholder farmers, Malawi, fertilizer use
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