Subsidies, aquaculture technology adoption, and welfare impacts in Ghana and Kenya

176 Pages·2017·2.11 MB·English

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Open Access Dissertations Theses and Dissertations
12-2016
Subsidies, aquaculture technology adoption, and
welfare impacts in Ghana and Kenya
Akuffo Amankwah
Purdue University
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Amankwah, Akuffo, "Subsidies, aquaculture technology adoption, and welfare impacts in Ghana and Kenya" (2016).Open Access
Dissertations. 902.
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Graduate School Form
30Updated
PURDUE UNIVERSITY
GRADUATE SCHOOL
Thesis/Dissertation Acceptance
This is to certify that the thesis/dissertation prepared
By AKUFFOAMANKWAH
Entitled
SUBSIDIES,AQUACULTURETECHNOLOGYADOPTION,ANDWELFAREIMPACTSINGHANAANDKENYA
DoctorofPhilosophy
For the degree of
Is approved by the final examining committee:
KWAMENAQUAGRAINIE
Co-chair
PAULV.PRECKEL
Co-chair
JOHNH.SANDERS
JUSTINL.TOBIAS
To the best of my knowledge and as understood by the student in the Thesis/Dissertation
Agreement, Publication Delay, and Certification Disclaimer (Graduate School Form 32),
this thesis/dissertation adheres to the provisions of Purdue University’s“Policy of
Integrity in Research” and the use of copyright material.
KWAMENAQUAGRAINIE&PAULV.PRECKEL
Approved by Major Professor(s):
GERALDE.SHIVELY 8/16/2016
Approved by:
Head of the Departmental Graduate Program Date

SUBSIDIES, AQUACULTURE TECHNOLOGY ADOPTION, AND WELFARE
IMPACTS IN GHANA AND KENYA

A Dissertation
Submitted to the Faculty
of
Purdue University
by
Akuffo Amankwah
In Partial Fulfillment of the
Requirements for the Degree
of
Doctor of Philosophy
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December 2016
Purdue University
West Lafayette, Indiana
ii

My parents, sisters, late sister, my extended family, and Mercy Wamuyu

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ACKNOWLEDGEMENTS
Ebenezer, this is how far the Most High God has brought me. I am very grateful to Him
for granting me the grace, strength, wisdom, and capacity to successfully complete the PhD
program.
Besides, a number of people have contributed to my PhD success that need
recognition, though words alone cannot express my heartfelt gratitude to them. I am
especially grateful to my major advisor, Dr. Kwamena Quagrainie for his guidance, insight,
and encouragement throughout the PhD program, and the dissertation in particular. I truly
appreciate the opportunity to work with him and tap into his intellectual prowess. I am
thankful to my co-chair, Dr. Paul Preckel, for his guidance, constructive criticism of my
work and invaluable feedbacks. His advice helped shape my thesis in the right direction. I
would also like to extend my heartfelt gratitude to my other committee members, Dr. John
Sanders and Dr. Justin Tobias, for their helpful insights and advice. I also appreciate the
assistance I received from Faculty members and students of the Department of Agricultural
Economics. I am equally indebted to the Purdue University for providing a conducive
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environment for my program.
I appreciate the financial assistance I received from the Department of Agricultural
Economics at Purdue University, USAID and Borlaug LEAP office, without which my
PhD journey would have faced a lot of financial obstacles. USAID and Purdue Department
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of Agricultural Economics provided funds for all academic related costs, while the Borlaug
LEAP office funded the data collection for this dissertation.
My sincere appreciation goes to the following people who contributed in different
capacities to the success of this dissertation. Thanks to Dr. Isabelle Baltenweck of the
International Livestock Research Institute (ILRI) in Nairobi Kenya for her supervisory role
during the data collection exercise in Kenya. I also thank the Ministry of Fisheries
Development, as well as the County and District Fisheries Officers (DFOs) in Nakuru,
Eldoret, Kakamegah in Kenya for helping me reach the fish farming households in the
Western and Rift Valley regions of Kenya. In like manner, I am grateful to the regional
fisheries commissions in Brong Ahafo, and Ashanti regions of Ghana. I must acknowledge
the enumerators – Alfred Otieno, Raymond Mwangata, and Duncan Sijeh in Kenya; and
Nathaniel Agyei, Abigail Tachie, and Eyram Agoba in Ghana for helping me conduct the
interviews, especially when language was a major barrier for me in Kenya.
I am grateful to all the friends I made at Purdue University, for helping me keep the
fire burning throughout the program. I must say you have been sources of inspirations to
me. Finally, to the Upper room and African Christian Fellowships, I say I appreciate your iv

prayers, encouragements and motivations.
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TABLE OF CONTENTS
Page
LIST OF TABLES ............................................................................................................. ix
LIST OF FIGURES ........................................................................................................... xi
ABSTRACT ...................................................................................................................... xii
CHAPTER ONE: INTRODUCTION ................................................................................. 1
1.1 General Introduction ...................................................................................................1
1.2 Demand for Improved Fish Feed in the Presence of a Subsidy: A Double-Hurdle
Application in Kenya ..................................................................................................3
1.3 Impact of Aquaculture Feed Technology on Fish Income and Poverty in Kenya .....6
1.4 Aquaculture Feed Technology Adoption and Welfare Impacts in Ghana ..................8
1.5 Caveats: Some Repetitions .......................................................................................10
1.6 Data ...........................................................................................................................11
CHAPTER TWO: DEMAND FOR IMPROVED FISH FEED IN THE PRESENCE OF
A SUBSIDY: A DOUBLE-HURDLE APPLICATION IN KENYA ... 14
2.1 Introduction ...............................................................................................................14
2.2 Modeling Framework and Estimation Technique ....................................................17
2.2.1 Conceptual Framework .................................................................................. 17
2.2.2 Control Function Approach: Effect of Subsidized Feed on Improved Feed
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Demand .......................................................................................................... 19
2.2.3 Model Choice for Improved Feed Demand: Double Hurdle Model .............. 22
2.2.4 Estimating Household’s Subsidized Feed Acquisition: Tobit Model ............ 24
2.2.5 Lognormal DH Model Specification and Estimation Technique for
Improved Feed Demand ............................................................................ 25
2.3 Data and Variables Measurements ...........................................................................27
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Page
2.3.1 Data and Study Area ..................................................................................... 27
2.3.2 Choice of Explanatory Variables ................................................................... 29
2.4 Summary Statistics ...................................................................................................31
2.5 Results and Discussions ............................................................................................38
2.5.1 Factors Influencing Household Acquisition of Subsidized Feed .................. 38
2.5.2 Factors Affecting Demand for Improved Feed .............................................. 40
2.5.3 Post Estimation Analysis ............................................................................... 45
2.6 Concluding Remarks and Policy Implications .........................................................47
2.7 References .................................................................................................................50
CHAPTER THREE: IMPACT OF AQUACULTURE FEED TECHNOLOGY ON FISH
INCOME AND POVERTY IN KENYA ....................................... 53
3.1 Introduction ...............................................................................................................53
3.1.1 Problem Statement ......................................................................................... 53
3.1.2 Background .................................................................................................... 55
3.1.3 Justification: Improved Technologies Adoption and Welfare Impacts ......... 57
3.2 Approaches to Welfare Impact Analysis of Technology Adoption ..........................59
3.3 Conceptual Framework and Estimation Technique ..................................................61
3.4 Definition of Outcome Variables, and Choice of Poverty Line ...............................65
3.5 Data and Summary Statistics ....................................................................................68
3.6 Results and Discussions: Propensity Score Matching Analysis ...............................75 v
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3.6.1 Estimation of Propensity Scores .................................................................... 75
3.6.2 Covariates Balancing Test ............................................................................. 78
3.6.3 Average Treatment Effect on the Treated (ATT) .......................................... 81
3.6.4 Sensitivity Analysis on Hidden Bias ............................................................. 87
3.7 Conclusion and Policy Implications .........................................................................88
3.8 References .................................................................................................................91
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Page
CHAPTER FOUR: AQUACULTURE FEED TECHNOLOGY ADOPTION AND
WELFARE IMPACTS IN GHANA ................................................ 94
4.1 Introduction ...............................................................................................................94
4.2 Background: Aquaculture in Ghana .........................................................................97
4.3 Theoretical Framework for Improved Feed Adoption/Demand ...............................99
4.3.1 Household’s Optimization Problem .............................................................. 99
4.3.2 Reduced Form Model of Improved Feed Demand ...................................... 103
4.3.3 Econometric Strategy for Improved Feed Adoption/Demand ..................... 104
4.4 Examining the Impact of Improved Feed Technology on Household Welfare ......106
4.4.1 Improved Feed Adoption and Household Welfare ...................................... 106
4.4.2 Correcting for Selection Bias: PSM ............................................................ 108
4.4.3 Robustness Checks ...................................................................................... 109
4.4.4 Welfare Outcome Variables Measurements ................................................ 110
4.5 Data .........................................................................................................................111
4.6 Characteristics of Fish Farming Households in Ghana ..........................................113
4.6.1 Spread of Improved Feed Adoption across Regions ................................... 113
4.6.2 Quantities of Feed Usage across Regions .................................................... 114
4.6.3 Summary Statistics and Variables Descriptions .......................................... 115
4.6.4 Unconditional Welfare Outcomes by Improved Feed Adoption Status ...... 120
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4.6.5 Characteristic Differences between Adopters and Non-Adopters ............... 121 i
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4.6.6 Length of Fish Production Cycle by Improved Feed Adoption .................. 125
4.6.7 Sources of Fingerlings and Production Outcomes, by Adoption Status ...... 126
4.6.8 Fish Marketing ............................................................................................. 128
4.7 Results and Discussion: Intensity of Improved Feed Adoption .............................129
4.7.1 Determinants of Improved Feed Adoption Intensity ................................... 129
4.7.2 Changes in Key Policy Variables and Probabilities of Positive Demand ... 135
4.8 Results and Discussion: Welfare Impacts of Improved Feed .................................137
4.8.1 Model Diagnostics: Covariates Balancing Test ........................................... 137
4.8.2 Average Treatment Effects of the Technology ............................................ 140