Farmers education and farm productivity in angiang province

UNIVERSITY OF ECONOMICS HO CHI MINH CITY VIETNAM INSTITUTE OF SOCIAL STUDIES THE HAGUE THE NETHERLANDS VIETNAM-NETHERLANDS PROJECT FOR M.A ON DEVELOPMENT ECONOMICS FARMERS' EDUCATION AND FARM PRODUCTIVITY IN ANGIANG PROVINCE BY PHAN TRUNG KY A Thesis Submitted in A Partial Fulfillment Of The Requirements for The Degree of Master Of Arts in Development Economics SUPERVISOR: TRAN THI BEN HO CHI MINH CITY MAY2002 TR~lb'tiG D~) li;9C THAiil"l PliO HO Cli f ; , t.!>: i 1\!r.!!i-;f'l TrmvtiN SJ\V-b~HttOC CERTIFICATION " I certify that the substance of this dissertation has not already been submitted for any degree and is not being currently submitted for any other degrees, and I certify that to the best of my knowledge any help received in preparing this dissertation, and all sources used, have been acknowledge in this dissertation" Date 30 January, 2002 PHANTRUNGKY ACKNOWLEDGEMENTS First and foremost, I would like to give all my thanks to all teaching staff, professors, and lecturers of the Vietnam-Netherlands M.A Project on Development Economics Thanks to them, my knowledge and interest in economic issues are better off I would like to express my thanks to my academic supervisor- Mrs Tran Thi Ben, who has advised me many good points and given me helpful encouragement in the process of writing this thesis I am really indebted to my classmates, close friends with whom I had a really interesting time discussing our topics I am also grateful to all farmers and local authorities in Angiang, who facilitated my field survey Last but not least, I would like to express my gratitude to all members of my family, my parents, who give me all their love and encouragement through the time writing this thesis Date 30 January, 2002 PHAN TRUNG KY ii CONTENTS CERTIFICATION ACKNOWLEDGEMENTS ii CONTENTS iii LIST OFT ABLES VI TABLE OF FIGURES vii LIST OF ABBREVIATIONS Vlll CHAPTER 1: INTRODUCTION 1.1 Problem Statement 1.2 Objectives of Study 1.3 Data 1.4 Methodology 1.5 Study Design CHAPTER 2: LITERATURE REVIEW 2.1 Definition and types of education 2.2 Empirical Evidence on the relationship between Education and Farm Productivity 2.2.1 Vietnamese evidence 2 Evidence from developing world 2.3 The role of education in agricultural production 10 2.4 Economic Efficiency and Technical Change 10 4.1 Technical and Allocative Efficiency 11 2.4.2 Education in case oftechnological change 12 2.5 Frontier and non-frontier approach 12 5.1 Frontier Production Function Approach 13 2.5.2 Non-frontier Production Function Approach 14 2.6 Estimation Issues 14 2.6.1 How Much Education is needed? 14 7.2 Whose Education in the household affects farm productivity? 15 CHAPTER 3: EDUCATION AND AGRICULTURAL PRODUCTION IN ANGIANG PROVINCE I Introduction about Angiang province 16 3.2 Angiang's Agriculture 16 2.1 Cultivation 19 3.2.2 Livestock 21 3.2.3 Aquatic product 22 3.3 Angiang's education 23 CHAPTER 4: RELATIONSHIP BETWEEN FARMERS' EDUCATION AND FARM PRODUCTIVITY IN ANGIANG PROVINCE I General information about the winter-spring and summer-autumn 26 4.2 Model Specification 27 2.1 Variable to be the dependent variable 27 2 Independent variables 29 Model to apply 29 4 Data collection 31 The survey and sample design 4.3 Estimation of the results 32 33 3.I Testing the representative of the sample 33 Empirical results 35 2.1 Regression results 35 4.3.2.2 Comments and diagnostic tests 37 4.3.2.2.1 Normality test of residuals 37 4.3.2.2.2 Heteoscedasticity test 38 4.3.2.2.3 Multicolliinearity test 38 4.4 Economic meaning of the results 39 CHAPTER 5: CONCLUSIONS AND SUGGESTIONS 5.1 Conclusions 46 5.2 Suggestions 46 v LIST OF TABLES Table 2.1: Estimated effects of education on agricultural productivity Africa Table 2.1 A: Supplementary information on studies of education and Table 2.2: Summary of empirical estimates of technical inefficiency Table 3.1: The share of GDP in Angiang and Vietnam in I998 17 Table 3.2: The share of GDP ofAngiang province, period I990-I999 17 Table 3.3: The agricultural structure ofAngiang, I996-2000 18 Table 3.4: The Value Added ofAgriculture, I996-2000 19 Table 3.5: Cultivated areas and output of cultivation, period I975-2000 19 Table 3.6: The structure of value of cultivation ofAngiang province 20 Table 7: Productivity of some agricultural products (Quintal/hectare) 21 Table 3.8: The number and output of some main livestock ofAngiang province 21 Table 3.9: Fishery Culture Area and Fishery Output, period I990-2000 22 Table 3.10: Angiang' education 24 Table 4.1 : Sown areas, Output of II districts in Angiang, 2000 32 Table 4.2: Descriptive Statistics of Output-Input Variables 34 Table 4.3: Descriptive Statistics of Output-Input Variables (Logarithm) 34 Table 4.4: Descriptive Statistics of Age and Education Variables 35 Table 4.5: Regression results 35 Table 4.6: Regression results 36 Table 4.7: R-squared ofRegression among independent variables 38 Table 4.8: Implications ofthe regression results for the economic 42 Table 4.9: Implications of the regression results for the economic 44 vi TABLE OF FIGURES Figure 1: Production vis-a-vis the Production Frontier 11 Figure 2: Frontier and Average Production Function 13 Figure 3: Structure of Education of Angiang province, 1976-2000 24 Figure 4: Normality distribution of residual 37 vii LIST OF ABBREVIATIONS ADB : Asian Development Bank AFTA : ASEAN Free Trade Agreement GOP : Gross Domestic Product GNP :Gross National Product LDCs : Less Developed Countries UNDP :United Nations Development Funds VLSS : Vietnam Living Standard Survey WB :World Bank CHAPTER! INTRODUCTION 1.1 Problem Statement Many recent studies have shown that education is one of the main factors of human capital which contribute to the productivity of workers and to modern economic growth (Schultz, 1995) Nowadays, in the agriculture, advanced technologies are applied largely and the traditional agriculture is step by step replaced by the modern agriculture In most developing countries, agricultural production is a very important sector It is widely accepted that an increase in agricultural productivity requires more complex technology, and to adapt to such environment farmers must have better education With modern agricultural practices, farmers' education becomes more important Mellor (1976) considers education in rural areas is the main factor to improve agricultural productivity in any strategy In Vietnam nearly 70 per cent of population still get income from agricultural activity (Que, 1998:2) and agriculture is considered as 'the backbone of the Vietnamese economy' (as a report of ADB) In the Mekong Delta, Angiang province has the highest The share of the agricultural output, with 2.35 million tons of paddy in the year 2000 agricultural sector in GDP is 44.5 per cent in the year 2000 (the Sixth Angiang Communist Party Conference Report 2001) Still heavily relying on agricultural production, an increase in farm productivity plays a very important role in economic development in Angiang province The reason to improve the productivity of agriculture is, as a report of the Ministry of Agriculture and Rural Development presented in March 29- Hanoi, most of agricultural products of Vietnam are less competitive than the those of our neighboring countries like Thailand, China, Indonesia, all are due to the low productivity of agriculture sector and it leads to high costs The situation will be worsened as Vietnam joining the A SEAN Free Trade Agreement [AFTA] in 2006 The second estimation: Ordinary Least Squares Estimation *********************************************************************** Dependent variable is LQ 113 observations used for estimation from to 113 *********************************************************************** T-Ratio[Prob] Standard Error Regressor Coefficient 6.1601[.000] 2.8130 45665 TS 5.9740[.000] 7270 45647 CM 5.8047[.000] 2.6502 45655 CT 9.2307[.000] 061639 LLD 56898 3.6255[.000] 062880 017344 LCP 20771 4.7861[.000] LCF 043399 2.1418[.035] 073568 034348 LT 028637 8886 [ 005] 0099139 LK 3.1012[.003] 045218 014581 SH -1.7635 [ 081] -.0020104 0011400 SHSQ 3.2972[.001] 022328 0067718 SHA 3.4186[.001] 0064387 0018835 AG 2.2258[.028] 061509 027635 AGA -2.1025 [ 038] -.8630E-3 4104E-3 AGASQ 030750 2.1746[.032] NEC 066869 2.1529[.034] 015039 0069856 SH15 *********************************************************************** 97) R-Squared 98407 F-statistic F(15, 399.3918 [ 000] R-Bar-Squared 98160 S.E of Regression 11218 5.0041 Residual Sum of Squares1.2206 Mean of Dependent Variable S.D of Dependent Variable.82705 Maximum of Log-likelihood 95.4924 OW-statistic 2.0764 *********************************************************************** Diagnostic Tests *********************************************************************** F Version *Test Statistics LM Version * * * *********************************************************************** * * * * * * * * * * A:Serial Correlation*CHI-SQ(1)=.50854[.476]* * B:Functional Form* * C:Normality * * CHI-SQ(1)=1.2955[.255]* * CHI-SQ(2)=.71430[.700]* * F(1,96)= * 43399[.512]* * F(1,96)= 1.1134[.294]* Not applicable * * * 22083[.639]* * D:Heteroscedasticity*CHI-SQ(1)=.22436[.636]*F(1,11)= *********************************************************************** A:Lagrange multiplier test of residual serial correlation B:Ramsey's RESET test using the square of the fitted values C:Based on a test of skewness and kurtosis of residuals D:Based on the regression of squared residuals on squared fitted values APPENDIX s average farm income per worker I is the age of household head lA is the average age of household workers except the head I is number of schooling years of the household head lA is the average number of schooling years of household workers except s the number of household worker ~ TS and CT are dummy variables CM: Chomoi, TS: Thoaison and CT: Chauthanh is land size per worker in cong · is chemical fertilizer per worker in million dongs ' is pesticide used per worker in million dongs s the value of capital stock owned by household valued at current PRICE, per worker, in million dongs :c is non formal dummy variable VB is the debt of the household to the bank je ;0503 no526 ;0706 noa15 i0704 i0627 ;0314 "0512 "0623 "0818 "0614 "0917 "0415 no318 "0506 "0320 no412 i0516 no6o2 ~0310 i0418 "0316 ~0420 "0405 i0230 i0540 i0426 "0322 "0507 "0527 i0646 i0613 i0405 ~0624 i0707 "0528 AGA 35.5 28 25.3 24.2 30 34.5 38.5 29.3 23.8 28.1 26 22.6 30 28 40 34 26.7 30.5 30 28 30 28 45 26.7 33 34 35 38 24.5 26.8 28 28 24 29 28 28.7 SHA 5.7 8.3 5.5 4.3 8.5 2.6 3.3 8.8 10.5 6.5 6.5 7.3 8 9.3 10 9 6.8 1.3 4.3 5.8 AG 51 41 37 32 53 46 45 47 48 42 40 32 60 46 43 48 37 47 40 56 46 54 46 40 58 48 43 45 37 47 44 48 35 39 45 39 SH 11 12 12 10 10 11 T 4 3 5 2 5 4 2 2 5 3 CM 0 0 0 0 0 0 1 0 0 0 0 0 0 0 TS 0 1 0 0 0 0 0 0 0 0 1 0 CT 0 0 0 0 1 0 0 0 0 0 0 1403 1523 1536 1424 1438 )704 1637 )519 1501 1409 1442 1532 )928 1409 )403 1229 1925 1301 1007 )929 )613 1304 1539 )632 1837 1420 1434 1410 3531 1811 1408 1421 1644 D427 D422 1645 1411 D601 D509 1543 D430 1433 1610 1732 1435 1526 D408 1415 1219 D705 1624 1619 D425 1535 1625 27 29 30 31 24 24.8 25.5 36.5 35 27 35 36 25.3 32 26 40 25.5 41 28.3 23.5 25.2 26 28 25.3 26 38.3 25 33.5 31.5 27 28 30 26.3 35 30 36 26 27.8 25 26.8 30 27.5 26.6 27 27.7 25.2 26 30 27 24.4 30 35 25.2 32 28.5 5 6.5 3.5 4.5 9.3 11.5 10 5.2 9.5 5.2 2.7 5 5.3 4.7 4.3 7.7 6.5 7.7 4.5 7.5 3.2 3.5 7.5 6.8 6.5 4.8 7.3 5 6.5 10 4.2 35 50 53 40 33 34 49 55 44 57 43 51 29 43 46 51 34 45 36 31 49 54 39 41 38 47 49 47 47 59 43 38 43 42 55 48 40 33 39 43 41 56 36 49 29 38 50 38 45 30 35 56 50 48 42 4 11 10 7 7 3 11 11 10 12 6 7 2 10 3 2 2 4 3 4 2 5 4 2 0 0 0 0 1 0 1 0 0 1 0 0 0 0 0 1 0 1 0 0 0 0 1 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 ;0634 ·o436 ·o631 ~0523 ;0741 ;0528 ·o330 ·o5o2 ·o629 ;0331 ;0512 ~0516 ;0722 ~0434 ~0614 ·o433 ;0302 ;0917 ~0511 ~0633 ;0808 ~0617 40 28 35 25.5 25 45 30 36 33.3 40 29.5 26.3 35 26.2 26.3 25 35 24.2 32.3 23 38.5 22.3 5.5 5.4 7.3 3.7 2.3 3.7 6.7 9.7 3.3 52 44 49 57 41 49 39 43 43 42 55 41 33 40 46 32 44 41 45 28 46 34 10 10 5 9 12 10 6 3 3 4 4 0 0 0 0 1 0 1 0 1 0 1 0 0 0 0 0 1 0 0 0 0 0 0 e 1503 )526 1706 )815 1704 1627 NEG ~14 ~12 1623 1818 1614 1917 1415 )318 1506 1320 )412 616 )602 )310 1418 1316 )420 1405 1230 1540 1426 1322 1507 1527 1646 1613 1405 )624 0 0 0 0 1 0 0 qo7 o 1528 1403 623 636 1424 438 )704 637 )519 501 1409 442 632 )928 409 )403 229 1925 1301 1007 )929 )613 '304 0 1 0 0 0 0 0 LD 11.5 11 9.7 5.2 26.5 14 27 15 7.5 22.5 6.5 20 15.5 6.5 24 14.5 10 14 28.5 10 9.1 16 14 18.4 10 26 10.5 19 4.2 6.5 10 7.2 12.5 24.4 9.5 4.5 10 17.3 29.8 10 18.8 18.2 6.8 11.5 14.5 19.4 15 7.8 16 7.5 Q 710 580 550 260 1550 925 1400 730 270 1150 230 195 300 300 1150 940 230 1400 750 400 850 310 1650 550 460 800 800 940 350 1450 510 1080 156 300 550 240 330 600 1350 400 210 245 460 1000 1400 470 1200 950 250 520 370 920 275 1070 800 300 960 290 OWB 13 10 16 17 15 30 6.8 20 0 4.5 15 20 11 2.5 13 10 20 1.5 12.5 5 18 11 20 7 11 0 11 20 15 20 12 15 10 CF 3.48 1.682 2.334 1.048 4.914 3.62 4.2 0.899 5.952 1.305 1.134 0.758 1.236 5.08 6.24 0.992 4.99 2.32 0.992 2.864 1.31 5.404 2.26 1.544 2.525 2.224 4.464 1.46 6.2 2.04 3.33 0.634 1.268 2.298 1.212 1.604 1.634 3.968 1.488 1.02 0.744 1.764 3.344 5.52 2.042 4.266 5.2 1.022 2.04 2.48 3.72 0.716 4.63 3.72 0.91 5.456 1.158 CP 1.6 2.4 0.6 2.5 5.6 0.16 K 1.52 6.6 0.85 6.44 49 20 26.84 0.7 21.04 2.33 0.49 1.3 1.05 13.95 37.6 8.15 15.5 5.96 3.1 0.91 0.5 48.25 8.39 1.25 2.1 22.49 26.3 2.06 20.1 ° 0.3 0.4 2.4 0.4 20 2.4 0.8 10 1.8 3.5 0.2 0.6 1.6 0.4 1.4 1.4 5 0.4 0.8 0.6 6 0.2 1.4 0.8 0.8 10.8 0.4 8.8 23 8.08 7.19 2.6 2.95 1.63 2.66 2.95 8.8 1.55 10.22 1.3 5.46 0.99 4.5 3.2 3.6 5.1 1.53 0.6 72.39 2.07 11.17 52.03 5.21 5.97 1.25 0539 10632 0837 0420 0434 0410 10531 0811 0408 0421 0644 10427 10422 0645 0411 10601 10509 0543 10430 0433 0610 0732 0435 0526 10408 0415 0219 10705 0624 0619 10425 0535 0625 0634 0436 0631 10523 0741 0528 0330 0502 0629 0331 0512 10516 0722 10434 10614 0433 0302 0917 10511 10633 0808 10617 0 0 0 0 0 0 4.5 5.2 7.6 13 13.4 10 18 18.2 21 13.5 7.1 17 3.5 3.9 3.6 20.5 14.2 9.5 8.4 15 10 0 6.6 0 0 10 4.8 23 16 7.5 19 10 18 14 15 10 9.5 20 13.8 25 17.5 22 0 0 6.2 30 6.5 17.4 4.4 20.4 19.4 22 0 20 2.8 185 240 350 650 115 600 520 950 1120 400 960 720 10 13 2.5 5 30 7.5 15 18 20 15 3.5 10 15 16 7.5 11 10 23 0 20 20 10 17 345 980 110 185 210 1100 740 550 380 980 75 500 240 260 465 160 1440 850 290 890 620 980 760 880 640 390 940 270 880 1150 1070 1050 330 1750 260 1050 114 1200 700 950 110 980 20 13 10.5 172 22 24 16 15 15 29 28 6.6 0.496 0.716 1.764 1.984 0.496 2.26 1.642 4.15 6.06 1.394 3.474 2.376 1.378 5.072 0.386 0.6375 0.744 4.8 3.864 1.732 1.764 2.89 0.496 2.648 0.744 1.12 1.984 0.496 6.632 3.33 1.324 5.45 1.156 3.6 3.308 3.224 1.544 0.992 5.516 1.488 3.86 5.96 3.86 4.33 0.814 1.24 2.976 0.496 3.32 3.72 5.456 0.358 4.95 0.736 0.3 0.4 0.3 2.2 2.5 4 0.8 0.2 0.6 0.4 3.5 0.42 0.2 0.2 2.4 0.4 0.8 0.3 2.5 0.4 10 0.8 0.3 0.8 0.8 3.6 0.6 10 4.4 2.5 0.44 0.8 1.4 0.9 1.4 2.6 0.1 0.16 0.65 4.62 6.29 9.33 1.9 12.75 14.64 20.22 7.58 28.2 0.95 19.17 12.21 36 0.84 0.83 4.1 19.8 9.57 1.8 1.17 3.5 5.55 1.85 0.04 3.89 7.38 4.99 22.95 7.65 12.86 1.18 18.74 7.3 6.6 4.4 13.5 1.48 5.5 0.3 45.38 30 5.74 22.5 15.55 16.3 4.6 17.15 1.25 8.2 0.9 23.85 4.6 9.8 1.39 Vietnam - Dutch project for MA in Development Economics AN GIANG HOUSEHOLD QUESTIONNAIRES arne of villages: ay of interview arne of interviewer: arne of interviewee: )de: ::msehold categorized by local : Rich Middle Poor VeryPoor 1rt I : Common Household Characteristics :hnic : 1: Kinh; 2: Khomer; 3: Chinese; : others :ople live in this household: ;ender Year of birth School years Relation ship withHH head Jobs