Details
| Original language | English |
|---|---|
| Pages (from-to) | 1369-1404 |
| Number of pages | 36 |
| Journal | Journal of the Association of Environmental and Resource Economists |
| Volume | 10 |
| Issue number | 5 |
| Early online date | 29 Aug 2023 |
| Publication status | Published - Sept 2023 |
Abstract
This article introduces a new Hopenhayn-Melitz-type model of heterogeneous producers with endogenous technology choice. Different from previous trade models, it describes smallholder producers in rural areas of developing countries in the context of environment and development economics. Shocks (climate change) and various policies affect the producers’ endogenous choice between market entry or exit and between simple or advanced technology. This adds new margins of adjustment to models used in this context. Based on these mechanisms, the theoretical analysis identifies a novel type of the rebound effect via market entry. The numerical application to coffee production in rural Vietnam shows that secondary effects of the shocks, such as changes in the number of producers, can be larger than the original impact. Technology-supporting policies can have unintended detrimental side effects on less productive producers.
Keywords
- climate change, coffee, heterogeneous producers, technology choice, Vietnam
ASJC Scopus subject areas
- Economics, Econometrics and Finance(all)
- Economics and Econometrics
- Environmental Science(all)
- Nature and Landscape Conservation
- Environmental Science(all)
- Management, Monitoring, Policy and Law
Sustainable Development Goals
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In: Journal of the Association of Environmental and Resource Economists, Vol. 10, No. 5, 09.2023, p. 1369-1404.
Research output: Contribution to journal › Article › Research › peer review
}
TY - JOUR
T1 - Economic Policy and Technology Choice of Heterogeneous Producers
AU - Hübler, Michael
AU - Schwerhoff, Gregor
N1 - Funding Information: its Executive Board, or its management. We are very grateful to three anonymous reviewers and editor Shanjun Li for many helpful comments. We thank Nguyen Duy Linh for his extremely helpful and inspiring advice on Vietnamese coffee production. We thank Oliver Schulte, Martin Petrick, and Franziska Bock at GIZ (German organization for international cooperation) for helpful comments, Judith Soto for proofreading, and Ulrike Grote, Thanh Tung Nguyen, and Nguyen Duy Linh for providing useful information. This article has benefited from presentations at the annual conference of the Canadian Economics Association in Banff and a project workshop in Potsdam in 2019. We gratefully acknowledge financial support by the German Federal Ministry of Education and Research (BMBF, project ROCHADE, grant 01LA1828C). Regarding the inspected supplementary data, we acknowledge financial support by the German Research Foundation (DFG) within the project FOR 756 and thank our collaborators involved in the project management, data collection, and data provision.
PY - 2023/9
Y1 - 2023/9
N2 - This article introduces a new Hopenhayn-Melitz-type model of heterogeneous producers with endogenous technology choice. Different from previous trade models, it describes smallholder producers in rural areas of developing countries in the context of environment and development economics. Shocks (climate change) and various policies affect the producers’ endogenous choice between market entry or exit and between simple or advanced technology. This adds new margins of adjustment to models used in this context. Based on these mechanisms, the theoretical analysis identifies a novel type of the rebound effect via market entry. The numerical application to coffee production in rural Vietnam shows that secondary effects of the shocks, such as changes in the number of producers, can be larger than the original impact. Technology-supporting policies can have unintended detrimental side effects on less productive producers.
AB - This article introduces a new Hopenhayn-Melitz-type model of heterogeneous producers with endogenous technology choice. Different from previous trade models, it describes smallholder producers in rural areas of developing countries in the context of environment and development economics. Shocks (climate change) and various policies affect the producers’ endogenous choice between market entry or exit and between simple or advanced technology. This adds new margins of adjustment to models used in this context. Based on these mechanisms, the theoretical analysis identifies a novel type of the rebound effect via market entry. The numerical application to coffee production in rural Vietnam shows that secondary effects of the shocks, such as changes in the number of producers, can be larger than the original impact. Technology-supporting policies can have unintended detrimental side effects on less productive producers.
KW - climate change
KW - coffee
KW - heterogeneous producers
KW - technology choice
KW - Vietnam
UR - http://www.scopus.com/inward/record.url?scp=85172282141&partnerID=8YFLogxK
U2 - 10.1086/724517
DO - 10.1086/724517
M3 - Article
AN - SCOPUS:85172282141
VL - 10
SP - 1369
EP - 1404
JO - Journal of the Association of Environmental and Resource Economists
JF - Journal of the Association of Environmental and Resource Economists
SN - 2333-5955
IS - 5
ER -