Welfare impacts of improved chickpea adoption: A pathway for rural development in Ethiopia?

- We study the impact of improved chickpea adoption using three rounds of panel data.
- Adoption is instrumented using a control function approach and double hurdle model.
- Improved chickpea increased household income and reduced $2.00 (median) poverty.
- We find strong impacts for the three lower landholding quartiles.
- Improved chickpea are a promising pathway for rural development in Ethiopia.

We analyse the impact of improved chickpea adoption on welfare in Ethiopia using three rounds of panel data. First, we estimate the determinants of improved chickpea adoption using a double hurdle model. We apply a control function approach with correlated random effects to control for possible endogeneity resulting from access to improved seed and technology transfer activities. To instrument for these variables we develop novel distance weighted measures of a household's neighbours' access to improved seed and technology transfer activities. Second, we estimate the impact of area under improved chickpea cultivation on household income and poverty. We apply a fixed effects instrumental variables approach where we use the predicted area under cultivation from the double hurdle model as an instrument for observed area under cultivation. We find that improved chickpea adoption significantly increases household income while also reducing household poverty. Finally, we disaggregate results by landholding to explore whether the impact of adoption has heterogeneous effects. Adoption favoured all but the largest landholders, for who the new technology did not have a significant impact on income. Overall, increasing access to improved chickpea appears a promising pathway for rural development in Ethiopia's chickpea growing regions.