Land Distribution, Imperfect Markets, and Modern Agricultural Value Chains: An Agent-Based Approach

Agricultural value chains in developing countries have undergone considerable change as a result of the food-related trade and foreign direct investment growth that has accompanied globalization. The rise of supermarkets, private grades and standards, as well as export horticulture, however, has threatened to exclude small-scale producers from the new agricultural economy, as such producers generally lack the access to credit necessary to meet the demands of modern value chains. Such exclusion represents a major impediment to the alleviation of upward pressure on global food prices as, due to a relatively low shadow price of labor, smallholders are typically considered more productive than their larger counterparts. In this context, the present paper develops an agent-based computational model to explore the welfare, productivity, and poverty ramifications of land reform in an agrarian economy characterized by credit and labor market imperfections as well as both traditional and modern value chains. The model illustrates the potential trade-off between equity and satisfaction of modern value chain demands.

Heath Henderson is a doctoral candidate in Economics at American University. His research focuses on equity-efficiency trade-offs in developing country agriculture. Prof. Paul Winters is his faculty adviser.

 

Studying the Dynamics of a Continous Double-Auction Market with Artificially Intelligent Agent Based Models

Recent research has shown the importance of zero intelligence agent based models in studying the features of real world financial markets. Many of the basic characteristics of financial markets have been successfully replicated by these relatively simple models. However, real market participants are not “zero intelligent”. This paper examines whether introducing some nominal intelligence enhances the predictive abilities of the models. I construct a continuous double auction agent based financial market with artificially intelligent agents. The model is used to predict the dynamics of the order book and order flow of a real market and compare the predictive ability to the benchmark zero intelligence agent based models. One month order flow data from the London Stock Exchange is used to calibrate and validate the models.

George Panterov, a doctoral candidate in Economics at American University, will be presenting his co-authored work with Leanne Ussher.  Currently, he is also part of the Research Support Group, where he is a consultant and trainer. His fields of interests are agent-based models, financial market microstructure and non-parametric statistics

Effects of an Input Subsidy Program on Land Allocation and Crop Diversification

In the 2005/06 agricultural season, the government of Malawi implemented a targeted input subsidy program to improve food self-sufficiency and incomes of the poor farm households. The targeted input subsidy program is intended to ease smallholder farmers’ access to productivity enhancing agricultural inputs for maize, and thereby increase the productivity of maize. Although the program may successfully raise the output farmers produce, food nutrition may be undermined if households modify their behavior in such a way that a greater share of resources are allocated to the production of a single crop. Thus, the paper evaluates the impact of Malawi’s Farm Input Subsidy Program on crop land allocation decisions and crop diversification. The paper will also account for the heterogeneity of impact across gender, and compare the effects on staple and commercial crops.

Wendy Karamba is a doctoral candidate in Economics and a Research Support Group consultant. This presentation represents preliminary research that will feed into her dissertation. Her faculty adviser is Prof. Paul Winters.

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The Research Support Group, as a part of the Center for Teaching, Research & Learning, is organizing this forum to highlight student research at American University. In addition to the research findings, this forum emphasizes research methods so students can share learning experiences with other students on campus. The Spring 2012 Student Research Forum is open to all masters and PhD students at AU. students who want to present can email ssrl@american.edu.

 

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