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Productivity and Welfare Effects of Nigeria's e-Voucher-Based Input Subsidy Program
Tesfamicheal Wossen1, Tahirou Abdoulaye2, Arega Alene3
1International Institute of Tropical Agriculture (IITA), Abuja, Nigeria.
World Development
|December 22, 2017
Summary
Nigeria
Area of Science:
- Agricultural Economics
- Development Economics
- Technology Adoption
Background:
- Traditional "smart" subsidies in Nigeria are being re-evaluated.
- Innovative mobile phone-based input subsidy programs are emerging.
- Focus on electronic vouchers for fertilizer and improved seed distribution.
Purpose of the Study:
- To evaluate the productivity and welfare impacts of Nigeria's mobile phone-based input subsidy program.
- To assess the program's effectiveness using household-level data from rural Nigeria.
- To analyze the distributional effects across gender and farm size.
Main Methods:
- Household-level data collection from rural Nigerian farming communities.
- Instrumental variable regression to address potential endogeneity of program participation.
- Robustness checks using alternative measures of program participation.
Main Results:
- The mobile subsidy program significantly enhances smallholder productivity and welfare.
- Estimated effects indicate substantial improvements in both productivity and welfare outcomes.
- No significant heterogeneity in program effects based on gender or farm land size was observed.
Conclusions:
- The program is marginally cost-effective with a benefit-cost ratio of 1.11.
- While improving average productivity aids food security, targeted support for disadvantaged groups is crucial.
- Optimizing distributional outcomes maximizes the program's contribution to food security and poverty reduction.
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