Farmer education and farm efficiency in Nepal : the role of schooling, extension services, and cognitive skills

This s e r i e s o f u n r e f e r e e d D i s c c s s i c n P a p e r s i s i r ~ t e n d e dt o p r o v i d 3n i n i t i a l c i r c u l a t i o n of work p r e p a r e d under t h e a u s p i c e s of t h e P o p u l a t i o n and Human Resources D i v i s i o n . Coments a r e t h e r e f o r e v e r y welcome. The ? a p e r s s h o u l d n o t be c i t e d w i t h o u t c l e a r a n c e by t h e a u t h o r . The views expressetl a r e n o t n e c e s s a r i l y t h o s e of t h e Uorld Bank Group. P o p u l a t i o n and Human Resources D i v i s i o n D i s c u s s i o n P a p e r Xo. 81-60 FAILHER EDUCATION AND FARM EFFICIENCY I N NEPAL: THE ROLE OF SCHOOLING, EXTENSION SERVICES, AND COGNITIVE SKILLS Prepared by: Tiean T. J d s o n , P o p u l a t i o n , H e a l t h and N u t r i t i o n Department P e t e r R. Xoock, C o n s u l t a n t , DEDPH . t T h i s p a p e r w a s p r e p a r e d . a s p a r t of World Bank Research Pro'$ect RPO 671-49, - " Education and Xural Development i n T h a i l a n d and Nepal". - - . B The World Bank Washington, D.C. 20433 a- U.S.A.  FXR.?EB EDUCATION . U D F.mY EFFICIENCY I N NEPAL: THE ROLE OF SCIIOOLING, EXTESSION SERVICES, .AND COGXITIVE SKILLS Abstract X r e c e n t review summarized f i n d i n g s of numerous s t u d i e s concerning t h e impact of t h e education l e v e l of fann o p e r a t o r s on t h e i r e f f i c i e n c y . The review concluded t h a t , vhen t h e r e a r e c o n d i t i o n s of change ( i n p r i c e s o r a v a i l a b l e technology o r a c c e s s t o markets) i n t h e fanner's environment, education c o n t r i b u t e s s u b s t a n t i a l l y t o e f f i c i e n c y . The s t u d i e s t h a t were reviewed l e f t unansvered, however, two important questions. The f i r s t is: t o what e x t e n t do t h e observed c o r r e l a t i o n s between education and e f f i c i e n c y r e s u l t n o t from t h e e f f e c t s of education b u t , i n s t e a d , from o t h e r a t t r i b u t e s • of farmers c o r r e l a t e d w i t h t h e i r having education? The sccond q u e s t i o n , c l o s e l y r e l a t e d t o t h e f i r s t , is: through which of i t s c o g n i t i v e outcomes does education have i t s e f f e c t s ? To o b t a i n answers t o t h e s e questions, t h e World Bank i n i t i a t e d two new c o l l a b o r a t i v e fann surveys - one i n Nepal and one i n Thailand o b t a i n two c a t e g o r i e s of d a t a t h a t were previously unavailable. The f i r s t to - c o n s i s t e d of d a t a on t h e family background of t h e head of t h e farm household and t h a t person's spouse. The second included measures of t h e a b i l i t y , c o g n i t i v e a c h i e v e ~ e n t ,a g r i c u l t u r a l knowledge, and modernity of a t t i t u d e s of t h e a d u l t members of t h e households surveyed. This paper r e p o r t s on t h e a n a l y s i s of t h e d a t a s e t from Nepal, which was g a t h e r e d f r a n a l o c a t i o n i n t h e Nepal T e r a i near t h e I n d i a n border. The farm households surveyed were chosen s o t h a t about h a l f were i n a r e g i o n exposed t o t h e newly- introduced t r a i n i n g - a n d - v i s i t (T & V) e x t e n s i o n s e r v i c e while t h e o t h e r h a l f were exposed t o l e s s I n t e n s i v e , t r a d i t i o n a l e x t e n s i o n s e r v i c e s . Thus, i n a d d i t i o n t o providing information on t h e mechanisms of education's e f f e c t s on e f f i c i e n c y , t h i s study e v a l u a t e s ( i n a preliminary way) t h e impact of T d V extension a s introduced i n Nepal. Our s t u d y f i n d s a p o s i t i v e e f f e c t of education on e f f i c i e n c y f o r . F t h e t h r e e major c r o p s ( e a r l y paddy, ].ate paddy, and wheat), b u t o n l y w i t h t h e wheat c r o p w a s t h e e f f e c t s t a t i s t i c a l l y s i g n i f i c a n t a t s t a n d a r d l e v e l s . There i s d e f i n i t e evidence of a t h r e s h o l d l e v e l of education ( 6 y e a r s ) below which education's i s p a c t i s small and above which t h e e f f e c t i s important. Since paddy h a s l o n g been grown i n Nepal and wheat i s new, o u r f i n d i n g s of a s t r o n g e r e f f e c t o f education on e f f i c i e n c y i n wheat production i s c o n s i s t e n t w i t h previous f i n d i n g s t o t h e e f f e c t t h a t education i s - i m p o r t a n t only f o r adapting t o changing circumstances. W e found no evidence t h a t eduatioa's e f f e c t s should be a t t r i b u t e d , w e n i n p a r t , t o family e c k g r o u n d c o r r e l a t e s o r t o a measure w e had of a b i l i t y . The farmer's numeracy d i d a f f e c t p r o d u c t i v i t y i n wheat production ( a s w e l l a s t h e propensity t o be grow+--g wheat a t a l l ) . Our measures of modernity and a g r i c u l t u r a l knowledge % . r e uncorrelated with efficiency.  A s s e s s i n g t h e nechanisms through which e d u c a t i o n h a s i t s e f f e c t s a l l o w s a n a s s e s s n e n t of t h e econonic S e n e f i t s of i s p r o v i n g s c h o o l q u a l i t y , t h e r e b y a l l o w i n g a n i a p r o v e d a s s e s s m e n t t o be a d e of t h e t r a d e - o f f between q u a n t i t a t i v e e x p a n s i o n ( i n numbers e n r o l l e d o r a v e r a g e number of y e a r s c o n p l e t e d ) and q u a l i t a t i v e inprovement. Our c a l c u l a t i o n s i n d i c a t e t h a t a one s t a n d a r d d e v i a t i o n inprovement i n t h e nuneracy t e s t s c o r e h a s a p r e s e n t v a l u e ( v e r y a p p r o x i m a t e l y ) of $125. T h i s is h i g h r e l a t i v e t o t h e p r o b a b l e c o s t of e f f e c t i n g s u c h a n improvement and p r o v i d e s a n i m p o r t a n t argument i n f a v o r of c a r e f u l c o n s i d e r a t i o n of p o l i c i e s t o improve s c h o o l q u a l i t y .  L FXZXER EDUCATION .\iD FAECY EFFICIENCY I N hXm.4L: THEROLE OF SCSOOLIYG. EXTENSION SERVICES. MD COGNITIVE SKILLS T a b l e of Contents Page No . Abstract ............................ i THEDATA ............................ 7 A g r i c u l t u r a l Data . . . . . . . . . . . . . . . . . . . . . . . h u n t and Type of E d u c a t i o n . . . . . . . . . . . . . . . . . ............... B a s i c Competences and I n f o r m a t i o n EDUCATION AXD TECHNICAL EFFICIENCY ............... F u n c t i o n a l Forms and Data .................. Basic Results ....... ................. Economic B e n e f i t s of School Q u a l i t y . . . . . . . . . . . . . . Nonlinear E f f e c t s of Education . . . . . . . . . . . . . . . . EDUCATION -AND TECHNOLOGICAL ADOPTION .............. 35 Data and Methods ....................... 36 Results ........................... 38 References ........................... 43 L i s t of T a b l e s V a r i a b l e D e f i n i t i o n s . Means and S t a n d a r d D e v i a t i o n s . AllFarms ......................... . ...... Means and S t a n d a r d D e v i a t i o n s . Crop Subsamples : C O % ~ - D O U ~ ~ Pr ~o ....... Sd u c t i o n F u n c t i o n R e g r e s s i o n s ....... Average M a r g i n a l Value Products. i n Rupees Summary of E f f e c t s of E d u c a t i o n and Competences i n .............. Product i o n F u n c t i o n R e g r e s s i o n s E f f e c t s of S c h o o l Attainment and ~ x t e $ s i o nC o n t a c t i n .. ........... 'Production Function Regressions L. ...... Meaos and S t a n d a r d D e v i a t i o n s . Adoption Subsample .... b Chemical F e r t i l i z e r and Wheat Crop Lo'it R e g r e s s i o n s Summary of E f f e c t s i n L o g i t R e g r e s s i o .......... L i s t of F i g u r e s 1. Schematic Model of Education's Impact on P r o d u c t i v e Efficiency ........................ 8 2. S i m p l i f i e d C a u s a l Diagram R e l a t i n g F a m i l y Background. E d u c a t i o n andproduction ....................... 29  FAMIEX EDLCATION L .XD F.LX?I EFFICIESCY I N SEPAL: TI23 XOLE OF SCHOOLISG, EXTEXSIGN SERVICES, A W COGNITIVE SKILLS * Dean T. Jamison and P e t e r R. ?bock Our purpose i n t h i s paper i s to examine t h e e x t e n t t o which t h e c o g n i t i v e outcomes uf education mediate between t h e education t h a t i n d i v i d u a l s r e c e i v e and t h e i r subsequent e f f i c i e n c y a s farm o p e r a t o r s . The d a t a f o r t e s t i n g a s p e c t s of t h i s c a u s a l a s s o c i a t i o n were o b t a i n e d i n t h e T e r a i r e g i o n of Nepal a s p a r t of a l a r g e r s t u d y i n t o t h e d e t e r m i n a n t s and consequences of both formal e d u c a t i o n (schooling) and nonformal e d u c a t i o n ( e x t e n s i o n s e r v i c e s ) i n r u r a l , low-income s e t t i n g s . Duz paper on s d u c a t i o n and a g r i c u l t u r a l e f f i c i e n c y f o l l o w s up a monograph on t h i s s u b j e c t t h a t reviews t h e e m p i r i c a l l i t e r a t u r e i n t h i s area through 1978, develops a c o n s i s t e n t and thorough t h e o r e t i c a l framework f o r examining t h e r o l e of education i n production, and t e s t s a number o f major hypotheses concerning education's e f f e c t s on a g r i c u l t u r a l e f f i c i e n c y u s i n g e a r l i e r d a t a s e t s from Thailand, Korea, and Malaysia (Jamison and Lau, 19bl). Although t h e d a t a s e t we c o l l e c t e d f o r t h i s paper l a c k s t h e i n t e r - f a r m p r i c e v a r i a t i o n t h a t would have e&bled us t o i n v e s t i g a t e t h e impact o f - * The r e s e a r c h r e p o r t e d h e r e was"c a r r i e d out a s p a r t of World Bank + s e a r c h - P r o j e c t RPO 671-49, "Education and Rural Development i n Thailand 2nd Nepal", which w a s undertaken by World Bank s t a f f and c o n s u l t a n t s @ c o l l a b o r a t i o with s t a f f of New ERA, a Nepalese r e s e a r c h and c o n s u t i n g firm. A n u m a r of our c o l l e a g u e s -- Bal Gopal Baidya, Susan C o c h k n e , Lawrence Lau, Joanne L e s l i e , h r l a i n e Lockheed, and Ra jendra S h r e s t h a -- have prn-.rided u s e f u l advice and a s s i s t a n c e on v a r i o u s a s p e c t s of t h i s work, and we wish t o acknowledge our indebtedness t o them. Erwin Chou and Suan Ying provided e x p e r t computer a s s i s t a n c e with a l l a s p e c t s of t h e a r a l y s i s reported h e r e , and we a r e p a r t i c u l a r l y g r a t e f u l f o r t h e i r c o n t r i b u t i o n s . Preliminary v e r s i o n s of some of t h e r e s u l t s r e p o r t e d h e r e v e r e p r e s e n t e d a t a 1980 workshop and appear i n i t s proceedings (Baidya, e t a l . , 1980). e d u c a t i o n on a l l o c a t i v e e f F i : i e n c y , A/ t h e household- level d a t a s e t was d e s i g n e d t o i n c l u d e p r s v i o u s l y overlooked v a r i a b l e s t h a t can be used t o extend our u n d e r s t a n d i n g of and i n c r e a s e our confid-ence i n t h e r e l a t i o n between e d u c a t i o n and e f f i c i e n c y i n production. I n particul.ar, t h e d a t a s e t i n c l u d e s i n f o r m a t i o n b o t h on t h e background of t h e farm o p e r a t o r s and on s e v e r a l dimensions of t h e i r c o g n i t i v e s k i l l . T h i s a l l o w s us t o a s s . s s e m p i r i c a l l y t h e e x t e n t t o v h i c h v a r i a b l e s a s s o c i a t e d v i t h e d u c a t i o n may be r e s p o n s i b l e f o r i t s a p p a r e n t e f f e c t on e f f i c i e n c y and t o a s s e s s ( i n a p r e l i m i n a r y way) t h e e x t e n t t o which s p e c i f i c outcomes of e d u c a t i o n a r e responsible f o r its effects. The paper i s o r g a n i z e d i n t o f o u r p r i n c i p a l s e c t i o n s . In the i n t r o d u c t i o n v e p r e s e n t an overview of t h e l i n k s between e d u c a t i o n and e f f i c i e n c y and i n d i c a t e t h e g a p s i n t h e e x i s t i n g e m p i r i c a l l i t e r a t u r e . The second s e c t i o n d e s c r i b e s o u r d a t a s e t . I n t h e t h i r d and f o u r t h s e c t i o n s , we l a y o u t t h e e m p i r i c a l a n a l y s e s and d i s c u s s o u r s u b s t a n t i v e f i n d i n g s . The t h i r d s e c t i o n i s a n a n a l y s i s of e d u c a t i o n and t e c h n i c a l e f f i c i e n c y ; t h e f o u r t h i s a n a n a l y s i s of t h e impact of e d u c a t i o n on t h e a d o p t i o n of new c r o p s and methods og production. t - 1/ I n a companion paper t o t h i s one P u d a s a i n i (1982) d o e s u s e d a t a on i n t e r - farm p r i c e v a r i a t i o n i n Nepal t o examine education's e f f e c t s on a l l o c a t i . v e e f f i c i e n c y , i . e . on a farmer's c a p a c i t y t o a d i l s t i n p u t and o u t p u t l e v e l s t o t h e prevailing p r i c e s , given h i s o r h e r production function.  3ACKGXOUND Education nay have p r o d u c t i v e v a l u e b o t h because i t e n a b l e s t h e nanager of a f i n t o produce l a r g e r o u t p u t q u a n t i t i e s from t h e same measured q u a f i t i t i s s of i n p u t s and because i t h e l p s t h e s a n a g e r t o a l l o c a t e t h e firm's r e s o u r c e s i n a c o s t - e f f i c i e n t manner, choosing which o u t p u t s t o produce, how much of each o u t p u t t o produce, and i n what p r o p o r t i o n s t o u s e i n p u t s i n t h e production of any o u t p u t . I n o t h e r words, e d u c a t i o n may enhance both d t e c h n i c a l e f f i c i e n c y and ? l l o c a t i v e e f f i c i e n c y i n production. Welch (1970) l a b e l s t h e s e t h e "worker" and " a l l o c a t i v e " e f f e c t s of education. The f i r s t i s I s i n p l y " t h e marginal product of e d u c a t i o n a s marginal product i s normally d e f i n e d , t h a t i s , i t i s t h e i n c r e a s e d o u t p u t per chcnge i n e d u c a t i o n , holding o t h e r f a c t o r q u a n t i t i e s c o n s t a n t " ; t h e second h a s t o do w i t h t h e manager's " a b i l i t y t o a c q u i r e and decode i n f o r m a t i o n about c o s t s and I productive c h a r a c t e r i s t i c s of o t h e r i n p u t s " (Welch, 1970,. p. 342). Economists o f t e n a s s e s s t h e economic b e n e f i t s of e d u c a t i o n i n wage employment by observing t h e c o r r e l a t i o n between e d u c a t i o n and t h e e a r n i n g s t h a t workers r e c e i v e . The l i t e r a t u r e documenting and i n t e r p r e t i n g t h i s c o r r e l a t i o n has p r o l i f e r a t e d over t h e two-decade p e r i o d s i n c e T.W. Schultz, , I I - i n h i s p r e s i d e n t i a l address t o t h e American Economics A s s o c i a t i o n , - r-eintroduced t h e concept of human c a p i t a l and urged members of t h e p r o f e s s i o n - & - - * 17 pursue t h i s f i e l d of i n q u i r y ( S c h u l t z , 1961). - 11 Outside t h e v a g e Although economists d u r i n g t h e f i r s t h a l f of t h e t w e n t i e t h c e n t u r y had tended t o i g n o r e investment i n human beings, t h i s s u b j e c t r e c e i v e d - wI c o n s i d e r a b l e a t t e n t i o n from e a r l i e r e c o ~ o m i s t sand p o l i t i c a l economists, from S i r William P e t t y down t o John S t u a r t X i 1 1 . For a n account of t h e c l a s s i c a l r o o t s of modern human c a p i t a l t h e o r y , s e e Kiker (1968). For an e x c e l l e n t compendium of r e c e n t s t u d i e s through mid-1975 on t h e c o n t r i b u t i o n of e d u c a t i o n t o e a r n i n g s , a t t h e micro l e v e l , and t o economic growth, a t t h e macro l e v e l , s e e Blaug (1978). s e c t o r , education's v a l u e i n p r o d u c t i o n becomes n o r e d i f f i c u l t t o a s s e s s . I n a s t u d y of f a n i l y consumption p a t t e r n s , : t i c h a e l (1972) h a s a t t e m p t e d t o show t h a t e d u c a t i o n r a i s e s an i n d i v i d u a l ' s " f u l l income" even when noney income remains t h e same. I t d o e s s o , h e a r g u e s , by i n c r e a s i n g t h e p r o d u c t i v i t y o f t h e s p e n t i n household p r o d u c t i o n . L/ R e c e n t l y , a few e c o n o m i s t s have t u r n e d t h e i r a t t e n t i o n t o t h e p r o d u c t i v e e f f e c t s of e d u c a t i o n f o r t h e self- employed. S i n c e a self- employed i n d i v i d u a l r e c e i v e s no "wage" a s s u c h , some of t h i s r e s e a r c h h a s sought t o e s t i m a t e education's marginal product ( t h e "worker e f f e c t n j d i r e c t l y by means of a p r o d u c t i o n f u n c t i o n a n a l y s i s . This p r o c e d u r e h a s a n advantage o v e r one t h a t r e l i e s o n market wages i n t h a t no assumption need be made about t h e e q u i v a l e n c e of wages and t h e m a r g i n a l product of l a b o r . Though t h i s procedure c o u l d , i n p r i n c i p l e , be used t o e s t i m a t e education's e f f e c t i n any s e c t o r , most o f t h e r e s e a r c h t o d a t e h a s focused on a g r i c u l t u r e and, w i t h i n a g r i c u l t u r e , e s p e c i a l l y on c r o p 1/ The o u t p u t s o f "househo&i production" a r e e n t i t i e s t h a t e n t e r t h e u t i l i t y - f u n c t i o n d i r e c t l y and a* n o t g e n e r a l l y a v a i l a b l e f o r purchase i n t h e marketplace. These outp'uts o r "commodities" a r e produced w i t h i n p u t s of market p u r c h a s e s and household members' t i m e (seeker, 1965). To t a k e one c l a s s of examples, Cochrane, L e s l i e and O'Hara (1982) r e v i e w a r a n g e of s t u d i e s showing education's c o n t r i b u t i o n t o t h e household " p r o d u c t i o n " of t h e h e a l t h and n u t r i t i o n of i t s members.  - 5 - - production. /1 Other economists have c o n c e n t r a t e d on t h e a l l o c a t i v e e f f e c t s of edczation. For reasons of d a t a a v a i l a b i l i t y , most of t h i s r e s e a r c h h a s made u s e of aggregated i n f o m a t i o n ( a t t h e d i s t r i c t , s t a t e , o r n a t i o n a l l e v e l ) , and a g a i n , t h e preponderance of i t has focused on a g r i c u l t u r a l production. !2 - An a s p e c t of a l l o c a t i v e e f f i c i e n c y i s t h e w i l l i n g n e s s of i n d i v i d u a l s t o adopt p r o f i t a b l e new technologies. A vast sociological d l i t e r a t u r e e x i s t s on t h e d i f f u s i o n of innovation. ?/ Nearly a l l of t h e s t u d i e s on t h i s s u b j e c t look a t e d u c a t i o n a s one f a c t o r determining o r accelerating a n individual's d e c i s i o n t o adopt a n innovation. One i n t e r p r e t a t i o n , f a v o r e d by many economists (and most e d u c a t o r s ) , of t h e c o r r e l a t i o n between e d u c a t i o n and e a r n i n g s i s t h a t e d u c a t i o n f u n c t i o n s t o enhance t h e productive c a p a c i t y of workers and a l l o c a t i v e c a p a c i t y of managers. An a l t e r n a t i v e i n t e r p r e t a t i o n , known a s t h e " screening h y p o t h e s i s , " s a y s t h a t e d u c a t i o n does not make workers more productive; i t merely i d e n t i f i e s t h o s e who were more p r o d u c t i v e t o begin with. According t o t h i s h y p o t h e s i s , e d u c a t i o n s i g n a l s p r o d u c t i v e a b i l i t y t o employers w i t h o u t a c t u a l l y - 1/, T h i s f o c u s may be a t t r i b u t e d t o t h e r e l a t i v e h o m o g a e i t y of a g r i c u l t u r a l p r o d u c t s and t o t h e f a c t t h a t s m a l l , family f a n n s m r v i v e today i n many ? p a r t s of t h e world, whereas comparable f i n n s have tcnded t o d i s a p p e a r i n most o t h e r s e c t o r s . A number of ~ i c r o l e v e l s t u d i e s of e d u c a t i o n and a g r i c u l t u r a l production i n low-income c o u n t r i e s have been summarized and t h e i r c o n c l u s i o n s s y n t h e s i z e d i n Jamison and Lau (1982). - 21 For a d i s c u s s i o n and review of such s t u d i e s , s e e Sch-rltz (1975). - 31 T h i s r e s e a r c h i s reviewed i n Rogers (1971) and Villaume (1977). affecting it. L/ I n one s e n s e , t h e s c r e e n i n g h y p o t h e s i s i s n o t r e l e v a n t t o s e l f - e n p l o y ~ e n t . I n self- employment, by d e f i n i t i o n , t k e r e i s no s e p a r a t i o n bet:~een employer and employee, and no need f o r s i g n a l s concerning t h e employee's ability. For r e s e a r c h purposes, however, t h e s c r e e n i n g h y p o t h e s i s i s every b i t a s r e l e v a n t t o self- employment a s i t i s t o wage employment. I n empirical c studies t h a t seek t o estimate the - - a u s a l impact of e d u c a t i o n on p r o d u c t i o n , without d i r e c t measures of o t h e r background f a c t o r s t h a t shape p r o d u c t i v e c a p a c i t y , e d u c a t i o n nay s e r v e a s a proxy f o r t h e s e f a c t o r s , and t h e s e s t u d i e s may l e a 6 t o e r r o n e o u s c o n c l u s i o n s . Host of t h e previous s t u d i e s on e d u c a t i o n i n farm p r o d u c t i o n have f a i l e d t o i n c l u d e c e a s u r e s of f a m i l y background. Hence, they a r e open t o t h e i n t e r p r e t a t i o n t h a t t h e r e p o r t e d r e s u l t s p r o v i d e a n upwardly b i a s e d e s t i m a t e of education's impact. I n t h i s s t u d y , we t r y t o c o n t r o l f o r family backgrocnd by i n c l u d i n g measures o f t h e farmer's childhood socioeconomic status. With t h e s e measures i n t h e a n a l y s i s , we c a n , w i t h some confidence, c l a i m t h a t any s t a t i s t i c a l e f f e c t s of e d u c a t i o n on p r o d u c t i v e e f f i c i e n c y (I a r e , indeed, c a u s a l e f f e c t s . - 1/ A third interpretation, t h e " c r e d e n t i a l l i n g hypothesis, " says t h a t e d u c a t i o n p a r t i t i o n s workers i n t o noncompeting groups. Bowles and G i n t i s (1976) provide a Marxian v e r s i o n of t h e c r e d e n t i a l l i n g h y p o t h e s i s . Of c o u r s e , t h e t h r e e i n t e r p r e t a t i o n s of t h e education - earnings c o r r e l a t i o n a r e n o t m u t u a l l y e x c l u s i v e ; i t i s q u i t e p o s s i b l e f o r a l l t h r e e mechanisms d ~ s c r i b e dh e r e t o be o p e r a t i n g a t t h e same time. An e x t e n s i v e economic l i t e r a t u r e h a s developed on t h e s c r e e n i n g h y p o t h e s i s , and on t h e impact of e d u c a t i o n on e a r n i n g s c o n t r o l l i n g f o r " i n n a t e " a b i l i t y . For a d i s c u s s i o n of s c r e e n i n g t h a t i n c l u d e s many r e f e r e n c e s t o t h i s l i t e r a t u r e , s e e Bowman (1976b). For a g e n e r a l d i s c u s s i o n ~ f t h e education - easnings c o r r e l a t i o n , s e e Blaug (1972).  Another q u e s t i o n i n a d e q c a t e l y addressed i n previous s t u d i e s has t o do with t h e i n t e m e d i a t e ouccones between e d u c a t i o n and prod-lction. Through which of i t s outcomes does education have y h a t e v e r e f f e c t s i t d o e s , i n f a c t , have on productive behavior? Bobman (1976a) h a s argued t h a t t h e e f f e c t s of e d u c a t i o n r e l e v a n t t o t h e m a l l farmer may be c a t e g o r i z e d under two major headings, " formation of competences" and " transmission of informa- tion" . The formation of b a s i c competences ( e , g , , l i t e r a c y , numeracy, a b s t r a c t 1 . reasoning a b i l i t y ) i s a primary r e s p o n s i b i l i t y of t h e school system. The I transmission of information (on p r i c e s and technology), which may r e q u i r e f r e q u e n t updating a s o l d information becomes o b s o l e t e , can be accomplished through a v a r i e t y of channels i n c l u d i n g t h e e x t e n s i o n s e r v i c e s . This study examines s e v e r a l c o g n i t i v e achievement measures i n a n a t t e n p t t o a s c e r t a i n t h e important mediating v a r i a b l e s between e d u c a t i o n and productive e f f i c i e n c y . F i g u r e 1 i l l u s t r a t e s t h e plan of t h e s t u d y , which e s s e n t i a l l y o r g a n i z e s t h e determinants of productive e f f i c i e n c y i n t o f o u r broad c a t e g o r i e s: ( i ) f anily I background, ( i i ) e d u c a t i o n , ( i i i ) t h e mediating achievement v a r i a b l e s j u s t r e f e r r e d t c . and ( i v ) c u r r e n t socioeconomic s t a t u s . THE DATA The d a t a f o r :he a n a l y s e s r e p o r t e d i n t h i s paper were o b t a i n e d from a survey of r u r a l households i n : w o of Nepal's 75 a d m i n i s t r a t i v e d i s t r i c t s : l / The d i s t r i c t s , Bara and Rautahat, a r e l o c a t e d i n t h e Nepal ~ e r z i . I n s i m p l e 9 terms, Nepal i s divided i n t o t h r e e e c o l o g i c a l zones running i n ' p a r a l l e l s t r i p s - 1/ This multipurpose survey was undertaken i n s u b s t a n t i a l p a r t t o p r o v i d e t h e d a t a f o r t h e a n a l y s e s r e p o r t e d i n t h i s paper. The survey was conducted by New ERA, a Nepalese r e s e a r c h and c o n s u l t i n g o r g a n i z a t i o n , and was designed j o i n t l y by s t a f f of New E RA and t h e World Bank. from e a s t t o w e s t . The northernmost zone, which s t r a d d l e s t h e b o r d e r between Nepal and China ( T i b e t ) , c o n s i s t s of t h e H i s a l a y a n Range. The middle zone, which i n c l u d e s Kathmand~and t h n Kathmandu V a l l e y , i s known a s t h e H i l l Region. It ranges i n a l t i t u d e from i , W O t o 4,000 meters. The T e r a i t o t h e - s a u t h i s a f l a t , f e r t i l e a r e a s t r a d d l i n g t h e border between t h e h i l l r e g i o n s of Nepal and t h e I n d i a n S t a t e s of Bihar and L ' t t a r Pradesh. The i n h a b i t a n t s of t h e T e r a i on t h e two s i d e s of t h e Indian- Nepalese b o r d e r s h a r e many c u l t u r a l and economic c h a r a c t e r i s t i c s . The people a r e p r i m a r i l y a g r a r i a n . Although t h e Eepal T e r a i comprises l e s s than a t h i r d of t h e c o u n t r y ' s l a n d a r e a and accounts f o r o n l y about 40 p e r c e n t of t h e p o p u l a t i o n , i t produces w e l l o v e r h a l f t h e c o u n t r y ' s a g r i c u l t u r a l o u t p u t , e x p o r t i n g s u r p l u s r i c e and o t h e r c a s h c r o p s b o t h i n t e r n a l l y w i t h i n N e p a l and i n t e r n a t i o n a l l y , p r i m a r i l y t o India. Our sample i s a s t r a t i f i e d random sample of households i n s i x pailchayats of Bara ( o u t of 109 panchayats i n t h e d i s t r i c t ) and s i x panchayats of Kautahat ( o u t ~f 132). A l i s t of owners of a l l d w e l l i n g s i n e a c h panchayat was o b t a i n e d from t h e l o c a l r u r a l h e a l t h workers. 11 Then, u s i n g a t h r e e - d i g i t random number t a b l e o b t a i n e d from t h e Nepal C e n t r a l Bureau of S t a t i s t i c s , hcuseholds t o be i n t e r v i e w e d were s e l e c t e d randomly w i t h i n panchayats u n t i l a. , e C 15- percent sample of households had been chosen i n e a c h panchayat. (Ten e x t r a households p e r panchayat were s e l e c t e d f o r replacement of households l o s t through sample a t t r i t i o n . ) - 21 - 11 These l i s t s had been prepared i n c o n a e c t i o n with t h e m a i a r i a e r a d i c a t i o n campaign. - 21 See S h r e s t h a , Eaidya, and S h r e s t h a ( f o r t h c o m i n g ) f o r a complete account of d a t a c o l l e c t i o n , t h e sampls :.reas, and t h e i n s t r u m e n t s used.  The suri t j i n s t r u m e n t s included q u e s t i o n s on household product i o n , f a m i l y h e a l t h and f e r t i l i t y , farmer e d u c a t i o n and competences, and g e n e r a l household c h a r a c t e r i s t i c s . I n t h i s paper, we do not addr-5s t h e h e a l t h and - f e r t i l i t y variables. A/ We r e s t r i c t our a t t e n t i o n t? a g r i c u l t u r a l production and nore e s p e c i a l l y t o t h e impact of e d u c a t i o n on t e c h n i c a l e f f i c i e n c y and a d o p t i v e behavior. The p r o d u c t i o n d a t a cover t h e 1977-78 a g r i c u l t u r a l y e a r (from mnsoon t o monsoon) and r e l a t e t o t h e t h r e s p r i n c i p a l c r o p s of t h e sample area- - early paddy, late paddy, and wheat. The s t u d y households were v i s i t e d - t h r e e times, f i r s t i n October-November 1977, next i n January- February 1978, and f i n a l l y i n April-May 1978. F i e l d workers f o r t h e i n t e r v i e w i n g were r e c r u i t e d i n t h e f i e l d , a t B i r g u n j ( z o n a l h e a d q u a r t e r s of Narayani Zone) and Guar ( d i s t r i c t h e a d q u a r t e r s of Rautahat). The f i n a l f i e l d team comprised s e v e n males and seven feztales, UIIO worked i n p a i r s . A 1 1 t h e f i e l d workers had graduated from secondary s c h o o l and spoke both Nepali ( t h e language i n which t h e i n s t r u m e n t s w e r e w r i t t e n ) and Bhojpuri ( t h e language of most of t h e respondents). N e p a l i and Bhojpuri a r e c l o s e l y r e l a t e d languages of t h e Indo-Aryan group. and t h e q u e s t i o n s were t r a n s l a t e d from Nepali t o B h o j p u r i i n the field. . I The i n i t c a r simple c o n s i s t e d of 792 householcis. However, a f t e r - - - e l i m i n a t i n g l a n d l e s s ho-~seholGs,landed households t h a t grew none of t h e t h r e e m a j o r c r o p s i n 1977-78, aad households missed i n any of t h e t h r e e rounds of d a t a B o ~ l e c t i o n ,w e a r e l e f t w i t h a maximal sample s i z e of 683. A l l of t h e - * houseRold heads i n t h i s s s s p l e a r e male and l i v e a t h o ~ e . Table 1 d e s c r i b e s B * 1 -1 T h i s i s but one i n a s e t of papers based on t h e T e r a i d a t a s e t . The o t h e r s i n c l u d e Cochrane ( i 9 8 1 ) , Cochrane, J o s h i , and ~ a n d w a r i i(19811, ~ e s l i e ,Baidya, and Nandwani (1981), and Jamison and Lockheed 1982). <  Table 1: V W L E DLFISLTICSS. W S AhD SIA.lUAD DEVIATIONS, AU FARMS - - Variable Hean Std. Iiev. Number Early Paddy (S-659) LP 1 Output ('kg*) EP 2 Area cuicivated (ha.) - EP 3 Labor i n p u t (person-days) hP 4 Female l a b o r (?roporcion) KP 5 U r e d l a b o r (proportion) E? 6 A n h a 1 i r p u t (ox-days) EP 7 Chrnical f e r t i l i z e r (9.1) t t e Paddy (3-397) LP 1 oucpuc (b.) LP 2 Area c u l t i v 8 t t d (ha*) L P 3 t b o r i n p u t (person-days) LP 4 F e ~ l a l a b o r (proportion) LP 5 Hired l a b o r (proportion) LP 6 A n h l i n p u t ( o x d a y s ) LP 7 ~ h d c a fl e r t i l i z e r (0.1) Y 1 Output (kg.) u k e a c u l t i v a t e d (ha.) 2 u t b o r input (?errondays) 3 U C Female l a b o r (proportion) U 5 Hired l a b o r (proportion) W 6 Animal input (ox-days) Y 7 Q a i c a l f e r t i l i z e r (0.1) Technological Adoption (K-683) 8 Chemical fertilizer ( 1 i f rued, 0 i f no:) 0.38 0.49 9 n e a t crop ( 1 i f c u l t i v a t e d . 0 i f n o t ) 0.71 0.46 . Other Variables (ti-683) 10 - C i s t r i c t (Bara-1. R ~ u t . h r t - 0 ) 0.48 0.50 683 11 School attainment (yrs.1 /r 1.19 2.74 683 12 1-6 yrs. o t s c b o l couplered (0.1) 0.13 0.34 683 13 7+ yrs. o f school c m p l e c c d (0.1) 0.07 0.26 683 14 Becent c o n t r a c t with a t e u a f o n agent (0.1) 0.30 0.46 66 1 I 15 tlouseholds i n p n c h a y a t with r e c e n t extension c o n t a c t (proportion) 0.29 0.23 683 I6 Age (yrs./lO) 4.37 1.37 683 I 17 b e r a c y (0-14) ld Licerar). (0.1) 19 Paven's Progressive h t r i c e s ( W ) s c o r e (0-36) 7.24 0.20 12.88 ' ' 4.40 0.40 4.46 683 683 576 20 A g r i c u l t u r a l knowledge test w o r e (0-12) 6.64 2.37 579 I 21 " b d e r n i t y " Index (1-9) - 4.45 1.71 553 22 23 2.0 Father's l a d h o l d i n g (b../10) Father's l i t e r a c y (0.1) Current landholding (ha. ) 'g - 0.30 0.11 1.39 0.56 0.31 2.42 608 681 682 25 - Harket value of h o u n (%./1,000) 26 27 Grain s t o r a g e f a c i l i t y on farm (0.1) Occ~pacion(farmer ouly-0, ocher-1) 6 - - 3.53 0.08 0.12 6.12 0.27 0.33 682 683 683 28 kiocseholds i n panchayat grovfng wheat ( p r p r t i o n ) 0.70 0.10 683 29 b u s e h o l d s i n p n c b y a t ruing chemical f e r t i l i z e r (proportion) 0.24 0.11 683 /a This and a l l subsequent individual- level v a r i a b l e s r e f e r t o the household head. t h e v a r i a b l e s used i n t h e e m p i r i c a l a n a l y s e s and p r e s e n t s t h e i r means ar.d standard deviations. A g r i c u l t u r a l Data .%st ( 6 5 9 ) o f t h e 683 h o u s e h o l d s grew e a r l y paddy i n 1977-78, whereas o n l y 397 a n d 484 grew l a t e paddy and wheat r e s p e c t i v e l y . A smaller number of cases f o r a n y p a r t i c u l a r v a r i a b l e i n T a b l e 1 r e f l e c t s m i s s i n g information i n t h e data set.l/ So t h a t t h e r e a d e r may a s s e s s t h e e x t e n t of a n y s e l e c t i o n b i a s induced by t h e s e m i s s i n g d a t a , d e s c r i p t i v e s t a t i s t i c s f o r e a c h of t h e a n a l y t i c subsamples w i l l be p r e s e n t e d i n t h e a n a l y s i s s e c t i o n s of t h e paper. Of t h e 683 h o u s e h o l d s i n o u r sample, 22 p e r c e n t c u l t i v a t e d j u s t one of t h e t h r e e m a j o r c r o p s i n 1977-78; 35 p e r c e n t j u s t two; and 43 p e r c e n t a l l three. T a b l e 1 i n d i c a t e s t h a t t h e a v e r a g e paddy c r o p , e a r l y o r l a t e , was l a r g e r ( i n h e c t a r e s p l a n t e d ) t h a n t h e a v e r a g e wheat c r o p . It i s w o r t h n o t i n g a t t h i s p o i n t t h a t paddy t e n d s t o b e t h e more l a b o r - i n t e n s i v e and wheat t h e more c a p i t a l - i n t e n s i v e of t h e two c r o p s . k'hereas t h e a v e r a g e l a b o r i n p u t p e r h e c t a r e c u l t i v a t e d was s m a k l e r f o r wheat t h a n f o r paddy, t h e r a t e s of a n i m a l , u s e and c h e m i c a l f e r t i l i z e r u s e were b o t h h i g h e r . The paddy y i e l d s i n o u r sample were 654 kg./ha. f o r e a r l y paddy and 817 kg./ha. f o r l q t e paddy. A 'J - - f a n n e r double- cropping w i t h t h e s e y i e l d s would have o b t a i n e d a n a n n u a l - o u t p u t o q 1 , 4 7 1 kg./ha., I - which compares q u i t e u n f a v o r a b l y b o t h w i t h t h e - 11 For example, w e g o t a n answer t o t h e q u e s t i o n on r e c e n t e x t e n s i o n con- t a c t ( v a r i a b l e 15) from o n l y 661 o f t h e 683 f a r m h e a d s ; a n d , o f t h e 659 f a n n e r s who grew e a r l y paddy i n 1977-78, o n l y 638 p r o v i d e d u s w i t h a n output estimate (variable EPl).  - 13 - n a t i o n a l average y i e l d i n t h e preceding (1976-77) crop y e a r of 1,890 kg./ha. and with t h e 1977-79 average f o r a l l developing c o u n t r i e s of 2,102 kg./ha. The l o v e r y i e l d s f o r our s m p l e may b e e x p l a i n e d by a drought t h a t a f f l i c t e d t h i s a r e a t h e g e a r of the survey. h e drought ended w i t h t h e o n s e t of t h e 1978 monsoon. k h e a t y i e l d s i n o u r sample ( a t 995 kg./ha.) were e s s e n t i a l l y t h e same a s t h e n a t i o n a l average of 1,004 kg./ha., b u t f a r below t h e a v e r a g e f o r a l l developing c o u n t r i e s of 1,443 kg./ha. Amount and Type of Education The e d u c a t i o n a l i n d i c a t o r s of primary i n t e r e s t f o r p o l i c y purposes a r e formal e d u c a t i o n a l a t t a i m e n t and exposure t o t h e government- provided extension services. The average s c h o o l a t t a i n m e n t of t h e farm heads i n o u r sample i s 1.19 y e a r s ( v a r i a b l e 11 i n Table 1 ) . School a t t a i n m e n t w i l l be handled h e r e both a s a quasi- continuous v a r i a b l e and, i n c o l l a p s e d form, as t h r e e i n d i c a t o r v a r i a b l e s - n e v e r went t o s c h o o l ( t h e omitted c a t e g o r y ) , eom- p l e t e d one- to- six y e a r s ( v a r i a b l e 12), and completed seven o r more y e a r s ( v a r i a b l e 13). A t one extreme, n e a r l y 80 p e r c e n t (544) of t h e 683 f a r m d e c i s i o n - makers never went t o school; a t t h e o t h e r , o n l y 50 i n d i v i d u a l s ( 8 p e r c e n t ) have i completed seven o r more y e a r s o f school. Of t h e s e 50 f a r m e r s , o n l y 10 c o n t i n u e d beyond t h e t e n t h y e a r . Our & ? i c e of six y e a r s a s a p o i n t a t which t o b r e a k t h e e d u c a t i o n a l continuum r e f l e c t s t h e s t r u c t u r e of t h e e d u c a t i o n a l system In Nepa:L, where t h e f i r s t - l e v e l of e d u c a t i o n , a s defined by UNESCO, now comprises t h e 8 f i r s t seven y e a r s o f school. 1/ Moreover, a t a n e a r l y s t a g e i n t h e d a t a a n a l y s i s , - 1/ Under t h e New Educational System Plan of 1971, t h e f i r s t seven y e a r s a r e divided i n t o t h r e e y e a r s of what i s c a l l e d "primary" and f o u r y e a r s o f "lower secondary" schooling. This i s followed by t h r e e y e a r s of " upper secondary" s c h o o l , upon completion of which a s t u d e n t may q u a l i f y for t r a i n i n g a t Tribhuvan U n i v e r s i t y .  we ran simple brea'cdowns of c r o p y i e l d s by e d u c a t i o n a l a t t a i n m e n t , and t h e s e tended t o support our d e c i s i o n t o break t h e a t t a i n ~ e n t variable a t t h i s point. Of t h e 661 f a r m e r s answering t h e q u e s t i o n , 30 p e r c e n t r e p o r t having been i n r e c e n t c o n t a c t with t h e government- run a g r i c u l t u r a l e x t e n s i o n program ( v a r i a b l e 14). O t h e r , more d e t a i l e d i n d i c a t o r s of e x t e n s i o n c o n t a c t a r e a v a i l a b l e i n t h e d a t a s e t , but t h e s e w i l l n o t be d i s c u s s e d s i n c e , u n f o r t u n a t e - l y , our a n a l y s i s showed none t o be any n o r e s u c c e s s f u l i n e x p l a i n i n g e i t h e r c r o p o u t p u t s o r t h e a d o p t i o n of new i n p u t s t h a n i s t h e crude, c o n t a c t / n o - c c n t a c t dichotomy. A second measure of e x t e n s i o n exposure, t h i s one o f i n d i r e c t exposure, i s t h e p r o p o r t i o n of households i n t h e farmer's panchayat r e p o r t i n g c o n t a c t w i t h t h e e x t e n s i o n serv!.ces ( v a r i a b l e 15). This is t o say, a v a l u e f o r v a r i a b l e 15 e q u a l s t h e panchayat- wide a v e r a g e of v a l u e s f o r v a r i a b l e 14, b u t any p a r t i c u l a r farmer's answer t o t h e q u e s t i o n u n d e r l y i n g v a r i a b l e 14 (coded e i t h e r "1" o r "0") i s n e c e s s a r i l y e i t h e r above o r below t h e v a l u e f o r v a r i a b l e 15. The sample households a r e d i v i d e d almost e v e n l y between Bara and Rautahat d i s t r i c t s ( v a r i a b l e 10). Households i n t h e two d i s t r i c t s d i f f e r s i g n i f i c a n ' t l $ with r e s p e c t t o c e r t a i n by v a r i a b l e s . Bara h o l d i n g s a r e , on a v e r a g e , s m a l l e r t h a n Kautahat h o l d i n g s , b u t Bara farmers r e p o r t a much - - h i g h e r i n c i d e n c e of e x t e n s i o n c o n t a c t . The h i g h e r i n c i d e n c e of e x t e n s i o n r - ' c o n t a c t i n Bara probably r e f l e c t s t h e i n t r o d u c t i o n t h e r e of t h e train- , * t ; ing- and- visit (TLV) system, which s t r e s s e s message s a t u r a t i o n and t h e . 8  - 15 - comnunication of a p p r o p r i a t e recommendations v i a s p e c i f i c a l l y t r a i n e d , s i n g l e - p u r p o s e e x t e n s i o n a g e n t s and c a r e f u l l y s e l e c t e d c o n t a c t f a r m e r s .l/ To t h e e x t e n t t h a t y i e l d s a r e h i g h e r i n Bara t h a n i n R a u t a h a t -- o t h e r v a r i a b l e s ( i n c l u d i n g t h e i n c i d e n c e of e x t e n s i o n c o n t a c t ) h e l d c o n s t a n t -- the d i f f e r e n c e i s l i k e l y d u e , a t l e a s t i n p a r t , t o t h e q u a l i t a t i v e improvement i n e x t e n s i o n r e s u l t i n g from t h e i n t r o d u c t i o n of T h V. The c o e f f i c i e n t on v a r i a b l e 10 is, t n u s , a l s o a n i n d i c a t o r of e x t e n s i o n impact. A f i n a l e d u c a t i o n a l c h a r a c t e r i s t i c t h a t may be expected t o a f f e c t p r o d u c t i v e e f f i c i e n c y is t h e farmer's work e x p e r i e n c e . One f i n d s two e x p e r i e n c e i n d i c a t o r s i n T a b l e 1, a g e ( v a r i a b l e 1 6 ) , a crude i n d i c a t o r of t h e amount of e x p e r i e n c e , and o c c u p a t i o n a l s t a t u s ( v a r i a b l e 2 7 ) , a n i n d i c a t o r of t h e of experience. The a v e r a g e a g e of t h e household heads i n o u r sample is j u s t u n d e r 44 y e a r s . The a g e s range from 1 4 t o 87. Yost (88 p e r c e n t ) of t h e f a n n e r s i n o u r sample have no employment o t h e r t h a n work on t h e f a m i l y farm. The remainder, i n a d d i t i o n t o farming, a l s o have employment i n t h e wage s e c t o r o r r u n a nonfarm b u s i n e s s . Basic cornpetences and i n f o r m a t i o n V a r i a b l e s 1 7 through 20 i n , a b l e 1 measure t h e farmer's numeracy, * , e l i t e r a c y , a b s t r a c t r e a s o n i n g a b i l i t y , and knowledge of t h e a g r i c u l t u r a l extension service's - r e c o m m e n d a t i o ~on cropping p r a c t i c e s . i These s k i l l s w e - - 2L 11 - The T h V s y s t e m w a s i a r o d u c e d i n Bara a s p a r t of t h e Narayani Zone I r r i g a t i o n Development p r o i e c t , f i n a n c e d by a n I n t e r n a t i o n a l Development Associatioz Credit. F O a ~ d e s c r i p t i o n of t h e T & V system, see Benor and H a r r i s o n (1977). The r e a s o n w e chose t o s p l i t t h e sample between Bara and R a u t a h a t d i s t r i c t s w a s t o p r o v i d e f o r i n c l u s i o n of f a r m e r s exposed t o T & V and f a r m e r s not s o exposed b u t vho were farming i n o t h e r w i s e similar c i r c u m s t a n c e s .  l y view a s t h e immediate outcomes of t h e farmer's ~ ~ m i background and e d u c a t i o n a l background, and a s i n t e r m e d i a t e between t h e s e background v a r i a b l e s and economic behavior ( s e e F i g u r e 1 ) . A farmer's numeracy s c o r e ( v a r i a b l e 17) i s based on t h e answers he gave t o 14 a r i t h m e t i c problems posed by a member of t h e i n t e r v i e w t e r n d u r i n g t h e c o u r s e of t h e survey.l/ A farmer w a s r a t e d a s l i t e r a t e ( v a r i a b l e 18) i f he could w r i t e h i s own name and read aloud a simple s e n t e n c e i n Fhojpuri o r Nepali. One farm head i n f i v e passed t h i s l i t e r a c y t e s t , t h e same a s t h e r a t i o of farmers who r e p o r t having a t t e n d e d school. The zero- o r d e r c o r r e l a t i o n c o e f f i c i e n t between v a r i a b l e 18 and a - r a r i a b l e i n d i c a t i n g whether o r not -he farmer e v e r went t o s c h o o l 2/ i s 0.96. The Raven's P r o g r e s s i v e ,&trices T e s t , a n instrument c o n t a i n i n g 36 a b s t r a c t r e a s o n i n g problems, and intended t o be r e l a t i v e l y language and c u l t u r e i n d e p e n i ~ x t (Raven, 1974), w a s used t o measure reasoning a b i l i t y ( v a r i a b l e 19). (There i s some evidence (e.g., Welland, 1981) t h a t t h e r e a r e a number of dimensions of " a b i l i t y " t h a t one should a t t e m p t t o c o n t r o l f o r i n e s t i m a t i n g t h e impact of education and i t s outcomes on p r o d u c t i v i t y ; t h e Raven's s c o r e , however, i s a l l t h a t w e have a v a i l a b l e .) L The survey team as'ked each farmer a number of q u e s t i o n s r e l a t i n g - - .* t o a g r i c u l t u r e and a g r i c u l t u r a l p r a c t i c e s . These were intended t o reflect* & t h e i n d i v i d u a l ' s knowl%dge of t h e a g r i c u l t u r a l e x t e n s i o n department and o f - 8 - * - 1/ X t y p i c a l q u c s t i o n was "If t h e c o s t of one mango i s 8 annas, how much w i l l 10 mangoes c o s t ? " - 2/ This is t h e sum of v a r i a b l e s 12 and 13. i t s c u r r e n t recommendations t o farmers i n t h e a r e a . The responses t o t h e q u e s t i o n s a e r e r a t e d a s " c o r r e c t " o r " i n c o r r e c t " and a s e l e c t i o n of q u e s t i o n s used t o form a n i n d e x of a g r i c u l t u r a l 'mowledge ( v a r i a b l e 20). U n y r e s e a r c h e r s , i n a n a l y z i n g observable d i f f e r e n c e s i n s o c i o - economic behavior i n developing a r e a s , have c o n s i d e r e d t h e r o l e of t h e i n d i - v i d u a l ' s " a t t i t u d e towards change ." The hypothesis h a s been t h a t a n i n d i v i d u a l ' s psychological outlook can be measured a l o n g a continuum t h e p o l e s of which may be l a b e l e d "modern" and " t r a d i t i o n a l " o u t l o o k s , and t h a t o b s e r v a b l e behavior i s s y s t e m a t i c a l l y r e l a t e d t o t h i s c o n s t r u c t . In t h e d e s i g n o f t h e r e s e a r c h p r o j e c t of which t h i s s t u d y forms a p a r t , i t was decided t o test B t h i s hypothesis i n a r u r a l sample. An index of modernity ( v a r i a b l e 21) was derived from t h e faL-merOsresponses t o n i n e a t t i t u d i n a l q u e s t i o n s a d a p t e d t o hepal from t h e s h o r t v e r s i o n (OM-12) of t h e I n k e l e s modernity i n s t r u m e n t ( I n k e l e s and Smith, 1974). C e r t a i n l y , a t t i t u d e s may f u n c t i o n as d e t e r m i n a n t s of b e h a v i o r , but we must confess t o some discomfort with t h e modernity concept. Nonetheless, we d i d t r y using v a r i a b l e 21 ( t h e modernity index) i n our a n a l y s e s o f , c r o p production and t e c h n o l o g i c a l adoption. Yet whenever t h i s v a r i a b l e w a s found t o hzve a n e f f e c t , t h e e f f e c t w a s o p p o s i t e i n s i g n t o what w e t h i n k s h o u l d l o s s a s t o how t o i n t e r p r e t t h i s p e r v e r s e f i n d i n g . - have been p r e d i c t e d ; t h a t i s , t h e e f f e c t was always n e g a t i v e . We are at a rFi v e n I our discomfort over t h e construe: i t s e l f and over t h e f i n d i n g t h a t "modernity" i s r e l a t e d n e g a t i v e l y t o productive e f f i c i e n c y , we have dropped t h i s v a r i a b l e from t h e f i n a l analyses.  EDUCATION .AND TECHXICAL EFFICIEXCY Technical e f f i c i e n c y r e f e r s t o a firm's a b i l i t y t o produce on t h e industry's production f r o n t i e r - t o achieve t h e maximum o u t p u t from a g i v e n bundle of p h y s i c a l i n p u t s ( l a n d , l a b o r , and c a p i t a l ) . Technical e f f i c i e n c y i s a n engineering concept r a t h e r t h a n a n economic one. I n discussing t e c h n f c a l e f f i c i e n c y , one does not c o n s i d e r t h e impact of p r i c e s on a f inn's behavlor. X f i r m i s more t e c h n i c a l l y e f f i c i e n t than a n o t h e r f i r m whenever i t s production f r o n t i e r i s h i g h e r t h a n t h e other's. Presumably, a f i r m t h a t is more t e c h n i c a l l y e f f i c i e n t t h a n a n o t h e r p o s s e s s e s more informa- t i o n about t h e production process. For example, a t e c h n i c a l l y e f f i c i e n t crop farmer p o s s e s s e s t h e b e s t a v a i l a b l e information on t h e timing of i n p u t s , handling of t o o l s , s p a c i n g of p l a n t s -- on a l l of t h e techniques of production not reflected i n t h e m e t r i c s used t o q u a n t i f y p h y s i c a l i n p u t s . To t a k e i n t o account d i f f e r e n c e s i n t e c h n i c a l e f f i c i e n c y a c r o s s f i r m s ( o r o v e r time), we c a n s p e c i f y t h e production f u n c t i o n s o t h a t i t i n c l u d e s on t h e r i g h t hand s i d e , i n a d d i t i o n t o measured physicaz i n p u t s ; i f - not measures of t h e techniques themselves, t h e n measures of c h a r a c t e r i s t i c s presumed t o be l i n k e d t o t h e u s e of t h e s e techniques. I n t h i s s t u d y , t h e p r o x i e s used i n c l u d e e d u c a t i o n And t h e c o g n i t i v e outcomes of 'education. The p r o d u c t i o n f u n c t i o n reads - where_Y i s t h e q u a n t i t y of o u t p u t , X i s a v e c t o r of p h y s r c a l i n p u t s , and - E is 3 vector of v a r i a b l e s t h a t c h a r a c t e r i z e t h e p a r t i c u l a r firm. The parameters of f apply t o a l i f i r m s i n t h e i n d u s t r y . Assuming a s t o c h a s t i c d i s t u r b a n c e term u n c o r r e l a t e d w i t h X and E permits u s t o e s t i m a t e f (and hence t h e e f f e c t s of E) by o r d i n a r y l e a s t squares. T. e r e g r e s s i o n e q u a t i o n i s an s s t i m a t e of t h e "average" production f u n c t i o n f o r t h e i n d u s t r y .  T h i s s e c t i o n b e g i n s w i t h a d i s c u s s i o n of t h e f u n c t i o a a l foim we u s e t o s o d e l p r o d u c t i o n and of t k e s p e c i f i c d a t a a v a i l a b l e f o r t h i s a s p e c t of o u r an ;is. It t h e n r e p o r t s o u r b a s i c r e s u l t s and d i s c u s s e s t h e i r implication: o r c a l c ~ l a t i n gt h e e c o n o a i c b e n e f i t s of i n p r o v i n g s c h o o l quality. Thr, s r c t i o n concludes w i t n r e s u l t s from e x p l o r a t i o n of a l t e r n a t i v e s p e c i f i c a t i o n s of e d u c a t i o n ' s e f f e c t on e f f i c i e n c y . F u n c t i o n a l Forms and Data The f u a c t i o n a l form chosen f o r t h e p r o d u c t i o n f u n c t i o n s e s t i m a t e d h e r e i s a mociif i c a t i o n of t h e Cobb-Douglas p r o d u c t i o n f u n c t i o n : o r , i n l i n e a r form, 0 11 i n which a is an e f f i c i e n c y m e t e r aad 8 i t h e e l a s t i c i t i of o u t p u t with r e s p e c t t o i n p u t Xi. a LnY The paranetsr yi (= Y ) may be i n t e r p r e t e d OEr as I n d i c a t i n g the p r o p o r t i o n a ~ echange i n output t h a t r e s u l t s when c h a r a c t e r - L/ % . btic (sap, age) i n c r e a s e s by one unit (a year). Lf is s 0-1 ' i n d i c a t o r v a r i a b l e r a t h e r than a continuous v a i i a b l e , then y i i n d i c a t e s T h i s is an approximation o a y . 'Ihe proporticmate change in o u t p u t that - & r e s d t s d e n E~ i n c r e a s e s by one unit. fro. - Ti to Fi+l,i. actually zi+l: the following where Yo is & t p u t - a t Ei. and Y1 o u t p u t a t This v a l u e is a p p r o x h a t e d by y i vhen yi i e a small f r a c t i o n . (The l a r g e r t h e a b s o l u t e value of y Y i , the poorer yi i s as an appsoxinaticn of c I-1.)  t h e a p p r o x i m a t e p r o p o r t i o n a t e d i f f e r e n c e between t h e o u t p u t produced by a f i n demonstrating t h i s p a r t i c u l a r c h a r a c t e r i s t i c ( s a y , c o n t a c t with t h e e x t e n s i o n s e r v i c e s ) and t h a t produced by a f i m n o t d e r n o n s t r a t i ~ g t h i s c h a r a c t e r i s t i c (no c o n t a c t w i t h t h e e x t e n s i o n s e r v i c e s j . Specifications i n v o l v i n g i n d i c a t o r v a r i a b l e s and o t h e r n o n l i n e a r s p e c i f i c a t i o n s a r e discussed a t t h e end of t h i s section. The r e s t r i c t i v e i m p l i c a t i o n o f t h i s s p e c i f i c a t i o n i s t h a t t h e e f f e c t of any c h a r a c t e r i s t i c (E ) on t h e i p r o d u c t i o n f u n c t i o n i s n e u t r a l , i.e., t h e e f f e c t is t o s h i f t the e n t i r e function. U t e r n a t i v e s p e c i f i c a t i o n s whereby c h a r a c t e r i s t i c s are p e r m i t t e d t o augment t h e e f f e c t s o f p h y s i c a l i n p u t s d i f f e r x t i a l l y have n o t y e t b e e n f u l l y e x p l o r e d w i t h t h i s d a t a set. - 11 ~ The v a r i a b l e s t o b e used 51, t h e p r o d u c t i o n f u n c t i o n a n a l y s e s are l i s t e d i n T a b l e 2. The v a r i a b l e l i s t i s a s u b s e t o f t h e v a r i a b l e s i n T a b l e 1, and t h e d e s c r i p t i v e s t a t i s t i c s i n any column are based o n o n e o f t h r e e s u b s a m p l e s o f households. The number of h o u s e h o l d s t h a t grew e a r l y paddy and f o r which w e have i n f o r m a t i o n o n of t h e v a r i a b l e s i n t h e v a r i a b l e l i s t i s 4 4 3 ( o u t o f 659 e a r l y paddy g r o w e r s ) o r 67 p e r c e n t of e a r l y paddy growers. The number i n t h e c a s e o f l a t e paddy i s 284 ( o u t o f 397) o r 72 C p e r c e n t ; i n t h e c a s e o f wheat, 343 ( o u t o f 484) o r 7 1 p e r c e n t . A comparison . o f T a b l e s 1 a n d 2 shows t h a t most v a r i a b l e s d i f f e r l i t t l e between t h e - - f u l l sample and t h e t h r e e c r o p s u b s a m p l e s e x c e p t f o r t h e f a c t .*at the C 11 e - W e d i d 5 however, r u n Chow t e s t s (Chow. 1960) f o r t h e t h r e e t d u c a t i o n g r o u p s ( 0 , 1-6, and 7+ y e a r s ) and f o r t h e two e x t e n s i o n g - r o u p s ( c o n t a c t and n o c o n t a c t ) and found t h a t t h e r e g r e s s i o n s l o p e s f o r t h e o t h e r v a r i a b l e s fn t h e p r o d u c t i o n e q u a t i o n s do n o t d i f f e r s j g n i f i c a n t l y a c r o s s t h e s e g r o u p s . Ths l a r g e s t F r a t i o i n any o f t h e s i x t e s t s (two c h a r a c t e r i s t i c s t i n e s t h r e e crops)- was 1.18, w i t h 1 6 and 286 d e g r e e s o f freedom. For a n example of a n a n a l y s i s i n which i n d i v i d u a l i n p u t e l a s t i c i t i e s depend on e d u c a t i o n a l backgrouud, see Noock (1951).  ...... 3 m h m 4 - 9 - N h m 4 U m m m o m m m m m - M ~ n m n = ~ dm A o o ~ j o 4 o do 4 4 4 9 du a o .... N V U m N - ~ h m - - ~ 4 d d d m P) n jr:a = ............ h a M 4 N a O m . T h N m u m M m m m d u a 4 d m w o o o o ~ o o p H m ~OU . . o m 9 0 q " T m ~ oP O ~m m h h m h ~ d ~ 3 o ~ o o 7 9 9 N nn m e n 2- Z a rWuQa) n4 aJ U rl u u 4 a \ Q urn . . 3 - 11 X O C m *s.ir;, '4 -4 o n t = u m a rr x h C U 4 Q I v 5 h O E P ) I U U X X U 0 m c o u r n u d Z - u e  farmers i n t h e c r o p subsamples a r e , on average, somewhat more s c h o o l e d t h a n o t h e r f a m e r s i n t h i s p d r t of t h ? T e r a l and somewhat moro l i k e l y t o 5ave been i n c o n t a c t w i t h t h e e x t e n s i o n s e r v i c e s . basic Results The l e s t - s q u a r e s r e g r e s s i o n r e s u l t s a r e p r e s e n t e d i n T z b l e 3. - 1/ For each c r o p , t h e v a r i a b l e s a r e e n t e r e d i n t h r e e s t e p s . 3 The p h y s i c a l i n p u t s and e d u c a t i o n a l background c h a r a c t e r i s t i c s a r e e n t e r e d f i r s t . Then, I t o d i s t i n g u i s h t h e d i r e c t and i n d i r e c t e f f e c c s of e d u c a t i o n on c r o p o u t p u t s , I we e n t e r t h e f a r m e r ' s competences and i n f o m a t i o n i n a second s t e p . Although I l i t e r a c y belongs c o n c e p t u a l l y i n t h i s second block of v a r i a b l e s , i n p r a c t i c e we were f o r c e d t o e x c l u d e i t from a l l of our a n a l y s e s . The c o r r e l a t i o n between e d u c a t i o n a l a t t a i n m e n t and t h i s c r u d e l y measured, 0-1 i n d i c a t o r of reading and *writicg a b i l i t y i s so h i g h {cf. p. 16) t h a t , when b o t h were i n c l u d e d , t h e r e g r e s s i o n c o e f f i c i e n t s f o r v a r i a b l e s 12, 13, and 1 8 w e r e a l t o g e t h e r u n s t a b l e , f l u c t u a t i n g ~ c a n i n g l e s s l yfrom e q u a t i o n t o e q u a t i o n - The t h i r d block of v a r i a b l e s c o n s i s t s of t h e two f a m i l y background s e a s u r e s - The purpose of t h i s f i n a l s t e p i s t o a s s e s s t h e e x t e n t t o which t h e r e g r e s s i o n - 1/ The r e g r e s s i o n s were e s t i m a t e d on t h e Wgrlrl Bank's Burroughs B7700 cr-xtputer using t h e m u l t i p l e r e g r e s s i o n subprogran of SPSS, Version H, R e l e a s e 5-1 (Hie, e t al., 1975). - - 2/ However, when t h e a b s o l u t e t- value f o r any v a r i a b l e brought Intt+the equation i s s m a l l , that v a r i a b l e may be e x c h d e d from subsequent, s t e p s - An e x c e p t i o n t o t h i s rule a p p l i e s t o t h e p a i r of s c h o o l i n g i n d i c a t o r s ( v a r i a b l e s 12 and 13) s i n c e t h e impact of e d u c a t i o n a l a t t a i n s e n t i s c e n t r a l t o t h i s s t u d y and s i n c e t h e e l i m i n a t i o n of e i t h e r one o f the p a i r of v a r i a b l e s would a l t e r t h e i n t e r p r e t a t i o n of t h e remaining r e g L e s s i o n coefficient .  Tabla 3: COBB-DOUGUS PR0DUCTIO.Y FVBCTXON SGRESSIONS Variable Early Paddy (N-443) Late Paddy (3-28L) (EP1) (EP2) (ZP3) (LPI) (LP2) (LP3) 4 r.1~1. labor (proportloo) 5 Uired labor (proporclon) LO lriacricc ( b r a - I , huca,iht-:.\ 12 1-6 v a . of u h o o l c o w l e t r d (0.1) 13 7+ yra. of school soqlarted (0,l) 5 Houmeholda l o pncbayae v l t h n c a o c aate~ioe contact (proportion) 19 b v c a ' a Prograamlva h c r l c e a (UX) score (3-36) P 0.686 0.689 0.631 0.802 0.805 0.805 0.751 0.754 0.754 - -- 'ace: Nur'Hra l o pareotheaem a r e - v a l w a . h a h e n i n d l c a t e a variable r.ooved from che equation bsaed on a n u l l r e a u l t tn an e a r l i e r s t e p . = o e f f i c f s n t s f o r e d u c a t i o n and c o g e i t i v e s T E l l s? n e a r 2 =he c a u s a l e f f e c t s or' *ese v a r i a b l e s on ? r o c k c t i o n , a d not the tiirecc e f f w t s s f f a m i l y The lad, labor, and a n k c a l ( v a t f a b l e s 2 ,- 3, a d 5) e l a s t i a t y s t b a t e s a r e a l l s i g n i f i c a n t l y g r e a t e r tham zero, d their v a l u e s r-in rcma&aUy stable a c r o s s a f f e r e n t s p e c i f i c a t i o n s o f t h e same reduction - runcsiou- The r e g r e s s i o n c o e f f i c i e n t s f o r or-ariables 4 a d 5, wherever s t a t h t f r a l l y s i m f i c a n t , s u g g e s t ehac female l a b o r i s a n r e p r o d u c t i v e than - mle labor, and m e d labor l e s s productive t h a n f e l y l a b o r - The u s e of & d c a L i e r c i l i z e r ( v a r i a 3 l e 7)--dili&, o n zhose fdnns h a t used i t , a r e w e & 48 Ulogzams p e r h e c t a r e CQ e a r l y paddy, 7 z kilagrams per h e u a r e a n l r t e paddy, a d 127 kilograms per h e c t a r e on uheae-aZded Between 22 and 35 percenu t o cr- outputs - 2/ T a b l e b g i v e s cornputed p a r g i d value ?r&ts o f land, l a b o r , and anL?a+ p w e r f o r a l l the crops, v a l u i n g paddy d *ea= respectZvely a t Es. 1.25 a d R s . 3-00 p e r k i l o g r a n , T d n g to v a r i a b l e 10 i n Table 3, we f i n d s h a r fa- i n Sara o b t a h e d c r o p o u t p u t s from 6 t o 22 percent U g h e r t k farms Z n Rantahat, other factors h e l d c o m t a n t . T h i s dlifference can be i n t e r p r e t n l t o r e f l e c t , a x least Z ~ part, I r h e quality of the e x t e n s i o n progrPn i n Bara, where che r Ed 3p the 'dbrect e f f e c t s ' - of r'llmf9y background, w e mean t h o s e not mediated edbcation d cognitive ski- (see F i g u r e 1)- - Td C o q m z e d from t h e r e g r e s s i o n c n e f f i c i e r r t s f o r v a r i a b l e 7- For example, fn e q n a t i o a @3): E 0.30k -1= I .tstimated e f f e c t = e 8-35  Table 4: AVEiWGE MARGINAL VXLLX PRODUCTS, IN RUPEES - - - Input ( u n i t ) Early paddy Late paddy Wheat Land ( h a . ) Labor (person- day) Xninal (ox- day) Note: The approximate farmgate p r i c e s o f paddy and wheat i n 1977- 78 were Rs. 1.25 and Rs. 3.00 per kilogram r e s p e c t i v e l y . t r a i n i n g - a n d - v i s i t e x t e n s i o n system had r e c e n t l y been introduced. By t h i s i n d i c a t o r , t h e e f f e c t of e x t e n s i o n q u a l i t y i s s t r o n g e s t f o r e a r l y paddy and weakest f o r wheat. I n no c a s e does off- farm employment ( v a r i a b l e 27) shov a s i g n i f i c a n t e f f e c t on o u t p u t i n t h e f i r s t s t e p of t h e r e g r e s s i o n sequence, and t h i s v a r i a b l e has been excluded from a l l subsequent s t e p s . The e s t i m a t e d e f f e c t s of t h e v a r i a b l e s of c e n t r a l i n t e r e s t i n t h i s paper a r e summarized i n Table 5. The e f f e c t s of e d u c a t i o n ( s c h o o l i n g and e x t e n s i o n c o n t a c t ) on crop o u t p u t s a r e s e e n t o be g r e a t e r i n t h e c a s e of wheat, a r e c e n t l y i n t r o d u c e d crop, t h a n i n t h e c a s e of paddy, a n e s t a b l i s h e d crop. With s c h o o l a t t a i n m e n t , t h e r e g r e s s i o n c o e f f i c i e n t f o r v a r i a b l e 13 is, i n every c a s e , l a r g e r t h a n t h e c o e f f i c i e n t f o r v a r i a b l e 12, and t h e l a t t e r is never s t a t i s t i c a l l y d i f f e r e n t from z e r o i n a o n e - t a i l e d test. Apparently, t h e completion of seven o r more y e a r s of s c h o o l h a s a p o s i t i v e s f f e c t on t h e t e c h n i c a l e f f i c i e n c y of farmers i n t h e Nepal T e r a i , i n c r e a s i n g crop o u t p u t s by a s much a s 3 1 p e r c e n t , v h e w s t h e completion of fewer t h a n seven y e a r s h a s no e f f e c t ; t h e r e is even, i n t h e c a s e of wheat, t h e s u g g e s t i o n of a n e g a t i v e e f f e c t of t h e one- to- six- year c a t e g o r y of s c h o o l attainment. The r e s u l t s p e r t a i n i n g t o t h e e f f i c a c y of nonformal, a d u l t - e d u c a t i o n ( i . e. d i r e c t and i n d i r e c t exposure t o t h e government-run e x t e n s ion program f o r f a r m e r s -- v a E i a b l e s 14 and 15) a r e encouraging i n t h a t t h e 3 - s i g n s of t h e r e g r e s s i o n c o e f f i c i e n t s a r e , i n a l l c a s e s , p o s i t i v e a s p r e d i c t e d . * b m 11 - The n o n l i n e a r i t y of e d u c a t i o n a l a t t a i n m e n t i n t h e Cobb-Douglas production f u n c t i o n s i s pursued more f u l l y Selow. See Table 6.  Tabie 5: SLZHABY OF EFFECiS OF EDL'GS'ZiON AS3 COFETESCES Y PRODUCTION FC!XTION IiEWSSXOSS L E a r l y paddy L a t e paddy L'ariable (EPI) (EP2) (EP3) (LP1) (L??) (LP3) (a) (Y2) (h'3) Educational Sackground - - - 10 D i s t r i c t (Bara 1. +k i r rt + * I + 0 0 0 Rautahat 0 12 1-6 y r s of s c h o o l c w - I e t e d (0.1) 0 0 0 0 0 0 0 0+ O* 13 7+ y e a r s of s c h o o l completed (0.1) (+I 0 (+I (+I (+) (+) * ++ ct 14 k c e n t c o n t a c t with e x t e n s i o n agent (0.1) 0 0 0 (+) * + (+I (+I (+I 15 Households i n panchayat with r e c e n t e x t e n s i o n contact (proportion) 0 0 0 0 0 0 cc 4+ ft Competences and Inf ormation 19 Raven's P r o g r e s s i v e P a t r i c e s (RF%) s c o r e (0-36) 20 A g r i c u l t u r a l knowledge t e s t s c o r e (0-12) 0 0 O* O* o* O* FaniIy Background 22 Father's landholding (ha.110) 23 Father's l i t e r a c y ( 0 , l ) / Note: Tbe symbols in c h i s t a b l e may b e i n t e r p r e t e d a s follows: * - b ( r e g r e r e o n c o e f f i c i e n t ) p o s i t i v e and s i g n i f i c a n t a t -05 l e v e l fn a one- tailed t e s t ; , r + - b p s i t i v e and s i g n i f i c a n t at -10 l w e l i n a one- tailed t e s t ; b p s i t i v e a d significant a t .l5 l w e l i n a one-tailedztest; - (+) 0 n u l l hypothesis could n o t be r e j e c t e d a c .15 l e v e l i n arone-tailed 'I - - t e s t ( e i t h e r i n t h i s e q u a t i o n , o r i n -me p r i o r e q l u t i o n i n which - c a s e v a r i a b l e uas excluded f r a t h i s equation): CJ* though n o t predicted, a n e g a t i v e e f f e c t i s suggested s by + i z e and I s i g n of p a l u e . The i n f l u e n c e of i n d i r e c t e x t e n s i o n c o n t a c t on wheat y i e l d s a p p e a r s e s p e c i a l l y powerful. The r e g r e s s i o n c o e f f i c i e n t f o r t h i s v a r i a b l c ( t h e p r o p o r t i o n of households i n t h e farmer's panchayat r e p o r t i n g r e c e n t e x t e n s i o n c o n t a c t ) i s 0.572 i n t h e f i n a l e q u a t i o n f o r v 5 e a t . The i n t e r p r e t a t i o n of t h i s v a r i a b l e i s t h a t a 10- percent i n c r e a s e i n e x t e n s i o n coverage i n a farmer's panchayat i s a s s o c i a t e d w i t h a 5- percent i n c r e a s e i n t h e fanner's wheat o u t p u t , o t h e r f a c t o r s h e l d c o n s t a n t i n c l u d i n g t h e farmer's own p e r s o n a l c o n t a c t w i t h t h e e x t e n s i o n program. The i m p l i c a t i o n h e r e is t h a t a farmer c a n a c q u i r e t e c h n i c a l i n f o r m a t i o n r e l e v a n t t o t h e p r o d u c t i o n of a new c r o p e i t h e r d i r e c t l y , from a n e x t e n s i o n a g e n t , o r i n d i r e c t l y , from o t h e r f a r m e r s who have t h e a s e l v e s been i n contact w i t h extension agents. A q u e s t i o n sometimes r a i s e d i n c o n n e c t i o n w i t h a n observed c o r r e l a t i o n between p a s t e d u c a t i o n and c u r r e n t p r o d u c t i v i t y c o n c e r n s t h e e x t e n t t o which e d u c a t i o n serves as a proxy f o r unobserved f a m i l y background v a r i a b l e s , t h e r e b y r e n d e r i n g t h e observed c o r r e l a t i o n s p u r i o u s . Figure 2 is a s i m p l i f i e d v e r s i o n of F i g u r e 1, showing t h e c a u s a l c h a i n l i n k i n g f a m i l y background, e d u c a t i o n , and p r o d u c t i o n ( o u t p u t q u a n t i t y ) . The p a t h s a, b, and c r e p r e s e n t , r e s p e c t i v e l y , t h e c a u s a l e f f e c t of family background on e d u c a t i o n , t h a t of e d u c a t i o n on p r o d u c t i o n , and t h a t of f a m i l y background on product ion: F a b F3 EDUC PROD , L A C Figure 2: SIMPLIFIED CAUSAL DIAGWY RELATING FAMILY BACKGROUND, EDUCATION, AND PRODUCTION I f , i n t h e absence of i n f o m a t i o n on f a m i l y background, a r e s e a r c h e r were t o r e g r e s s PROD on TDUC f o r a s m p l z of p r o d u c e r s , t h e r e s u l t i n g r e g r e s s i o n c o e f f i c i e n t vould tend t o o v e r e s t i s a t e b, t h e c a u s a l e f f e c t of e d u c a t i o n on production. The b i a s vould 5e g r e a t e r , t h e g r e a t e r i s c ( t h e c a u s a l a f f e c t on p r o d u c t i o n of family background, t h e v a r i a b l e o m i t t e d from t h e r e g r e s s i o n equation). To determine t h e e x t e n t t o which e d a c a t i o n , i n s t e p s ( 1 ) and ( 2 ) of t h e p r o d u c t i o n f u n c t i o n r e g r e s s i o n s , s e r v e s a s a proxy f o r ;mobserved f a m i l y background c h a r a c t e r i s t i c s , w e e n t e r i n s t e p (3) two measures of f a m i l y backgrougd -- father's l a n d h o l d i n g and f a t h e r ' s literacy (variables 22 and 23). I n general, t h e regression coefficients f o r these variables a r e s t a t i s t i c a l l y n o n s i g n i f i c a n t , and t h e c o e f f i c i e n t s f o r t h e v a r i a b l e s a l r e a d y i n t h e s q u a t i o n s are u n a f f e c t e d by t h e e n t e r i n g of f a m i l y background. It would seem t h a t t h e c a u s a l e f f e c t of a farmer's f a m i l y background on t e c h n i c a l e f f i c i e n c y i n a g r i c u l t u r e is, t o a l a r g e e x t e n t , mediated by - e d u c a t i o n (which L s a f f e c t e d by f a m i l y backgrodnd -- see Jamison and Lockheed, 1982). The s t a t i s t i c a l e f f e c t s of s c h o o l a t t a i n m e n t and exposure t o t h e e x t e n s i o n s e r v i c e s i n s t e p s ( 1 ) and ( 2 ) of t h e r e g r e s s i o n s t h u s a p p e a r true causal effects. I I The e s t i m a t e d e f f e c t s of numeracy, r e a s o n i n g a b i l i t y (RPM s c o r e ) , - - and a g r i c u l t u a l knowledge - t h e measured outcomes of e d u c a t i o n -- a r e , for '9 t h e most p a ; r t , ~ s t a t i s t i c a l l yn o n s i g n i f i c a n t . - The r e g r e s s i o n c o e f f i c i e n t f o r - - nuneracy i s p o D i t i v e i n e v e r y case, b u t s i g n i f i c a n t a t t h e .05 l e v e l o n l y i n t h e c a s e of wheat. 4 A t l e a s t f o r wheat, i t a p p e a r s t h a t numeracy may b e a n I i m p o r t a n t i n t e r v e n i n g v a r i a b l e between s c h o o l a t t a i n m e n t and t e c h n i c a l  efficiency (cf. , i n Table 3, t h e r e g r e s s i o n c o e f f i c i e n t s i n e q u a t i o n s (Wl) and (W2) f o r v a r i a b l e 13). The r e g r e s s i o n c o e f f i c i e n t f o r f a m e r ' s .RPX s c o r e i s s t a t i s t i c a l l y s i g n i f i c a n t only i n t h e c a s e of e a r l y paddy. The r e s u l t s f o r t h e a g r i c u l t u r a l knowledge v a r i a b l e a r e puzzling; t h e r e g r e s s i o n c o e f f i c i e n t s a r e , i n most c a s e s , negative. One d g h t choose t o conclude t h a t t h i s v a r i a b l e does n o t n e a s u r e what it w a s intended t o s e a s u r e . Both f o r e d u c a t i o n a l a t t a i n m e n t and f o r numeracy, t h e r e a r e r c l a t i v e l y weak e f f e c t s on p r o d u c t i v i t y f o r f a m i l i a r , t r a d i t i o n a l c r o p s ( e a r l y and l a t e paddy); f o r t h e r e c e n t l y introduced wheat crop, however, d e f i n i t e e f f e c t s a r e evident. T h i s is c o n s i s t e n t v i t h S c h u l t z * ~(1975) h y p o t h e s i s t h a t education is of v a l u e only i n a changing environment. I The i n c l u s i o n of t h e numeracy t e s t s c o r e i n t h e production f u n c t i o n s allows a n e a t i s a t i o n of t h e economic r e t u r n s t o q u a l i t y improvement i n education; t h i s t5ereby extends previous work on t h e r e t u r n s t o education so a s t o i n c l u d e a n o t h e r important dimension of ~ d u c a t i o n a lp o l i c y . I n order t o provide a n approximation of t h e b e n e f i t s of a p o l i c y t o improve t h e q u a l i t y of i n s t r u c t i o n i n mathematics, w e c a l c u l a t e d t h e marginal v a l u e product of a one s t a n d a r d d e v i a t i o n (i.e., 4.4 p o i n t ) i n c r e a s e i n t h e numeracy t e s t s c o r e i n r . I each of t h e t h r e e major crops. Using t h e p r o d u c t i o n f u n c t i o n s i n Table 3 and - t h e p r i c e s i n Table 4 we f i n d a marginal v a l u e 2roduct of R s . 27 p e r y e a r f o r e a r l y paddy, R s . 49 f o r l a t e paddy, and RX 90 f o r wheat. The p r e s e n t value of t h e s e b e n e f i t s , p r o j e c t e d over a %byear - * R s . 481, and Rs. 884 r e s p e c t i v e l y . These t o t a l t o R s . working l i f g , , * - ftb* 1,626'Ar about U.S. ,- W. 261, $125, a s u b s t a n t i a l m u l t i p l e of t h e c o s t of a s i n g l e y e a r of schooling. On t h e one hand, t h i s amount overestimates b e n e f i t s because not a l l f a r n e r s grow  wheat, but on t h e o t h e r hand, s i n c e h i g h e r numeracy i n c r e a s e s t h e p r o b a b i l i t y of growing t h e prof i t a b l e wheat crop, i t u n d e r e s t i m a t e s t o t a l ' benefits. I n any c a s e , t h e f i g u r e should be regarded only a s an approxina t ion. - I t is d i f f i c u l t t o compare t h i s e s t i m a t e d b e n e f i t of a one s t a n d a r d d e v i a t i o n improvement i n numeracy w i t h t h e c o s t s t h a t might be r e q u i r e d t o e f f e c t such an improvement. The reason i s t h a t , t o t h e authors' knobsedge, no s t u d i e s e x i s t r e l a t i n g achievement a t some p o i n t i n elementary s c h o o l t o a d u l t achievement l e v e l s . I t i s , however, s o t unreaqonable t o suppose t h a t a s c h u o l i n t e r v e n t i o n r e s u l t i n g i n a one s t a n d a r d d e v i a t i o n s c o r e improvement over t h e t y p i c a l s c h o o l p e r i o d ( i n our sample only 1.2 y e a r s ) would r e s u l t u l t i m a t e l y i n a one s t a n d a r d d e v i a t i o n i m p r o v e a ~ n t - i n adult scores. E f f e c t i n g a one s t a n d a r d improvement is, however, r a t h e r d i f f i c u l t ; n o n e t h e l e s s , s t u d i e s of improved textbook a v a i l a b i l i t y and of e d u c a t i o n a l r a d i o (Jamison e t a l . , 1981) demonstrate iaprovement of - 2 t o 1 s t a n d a r d d e v i a t i o n s a t p e r annurn c o s t s p e r s u b j e c t f a r lower t h a n $125. It s e e n s l i k e l y , then, on t h e b a s i s of t h i s a d m i t t e d l y p r e l i m i n a r y a n a l y s i s , t h a t economic b e n e f i t s a r e l i k e l y t o exceed, perhaps s u b s t a n t i a l l y , t h e c o s t s of a t l e a s t some approaches t o s c h o o l q u a l i t y improvement. L . t Nonlinear E f f e c t s of Education A s i n d i c a t e d above, t h e e f f e c t of s c h o o l a t t a i n m e n t i n t h e - - Cobb-Douglas prnduct i o n f u n c t i o n s .appears t o have a d i s t i n c t thresho?. Farmers who have-completed one- to- six y e a r s of school a r e no more p r d l u c t i v e E $! t h a n farmers who-have never been t o s c h o o l , b u t farmers who have compreted seven o r s o r e y e a r s of s c h o o l a r e s i g n i f i c a n t l y more p r o d u c t i v e than farmers who have completed f e v e r t h a n seven. Lockheed, Jamison, and Lau (1980) summarize t h e r e s u l t s of 37 e a r l i e r farm - level s t c d i e s of e d u c a t i o , ~and c r o p p r o d u c t i o n i n low-income c o u n t r i d s . O f t h e 37 s t u d i e s , e i g h t s p e c i f i e d t h e r e l a t i o n becween o u t p u t ( o r t h e l o g of o u t p u t ) and e d u c a t i o n a s a two- stepped f u n c t i o n , b r e a k i n g t h e e d u c a t i o n a l a t t a i n m e n t continuum e i t h e r a t t h r e e y e a r s o r six y e a r s of s c h o o l completed. A i l b u t one of t h e e i g h t s t u d i e s reported s t a t i s t i c a l l y s i g n i f i c a n t regression c o e f f i c i e n t s f o r t h e i n d i c a t o r v a r i a b l e s used. The c l e a r s u g g e s t i o n i n t h e s e s t u d i e s , c o r r o b o r a t e d by t h e p r e s e n t s t u d y , i s t h d t a n i n d i v i d u a l rsho completes j u s t "a f e c " y e a r s of s c h o o l ( f e v e r t h a n f o u r y e a r s , o r fewer t h a n s e v e n y e a r s , depending on t h e s t u d y ) d o e s n o t r e t a i n enough l e a r n i n g t o b e n e f i t from i t l a t e r a s a e push t h e i n v e s t i g a t i o n of e d u c a t i o n ' s r o l e i n a g r i c u l t u r a l W p r o d u c t i o n f u r t h e r i n T a b l e 6, where we r e p o r t t h e r e s u l t s of t h r e e new r e g r e s s i o n s f o r e a c h of t h e t h r e e crops. The n o d i n e a r i t y of t h e r e l a t i o n between s c h o o l a t t a i n m e n t and t h e n a t u r a l l o g of o u t p u t is borne o u t when we compare, f o r each c r o p , e q u a t i o n ( 3 ) , c a r r i e d o v e r from t h e e a r l i e r t a b l e s , and e q u a t i o n ( 4 ) i n which t h e quasi - continuous measure of s c h o o l a t t a i n m e n t (variable 11) i s s u s b t i t u t e d f o r t h e two i n d i c a t o r v a r i a b l e s ( 1 2 and 1 3 ) ; . -2 e q u a t i o n (3) i s J i n e v e r y c a s e , a b e t t e r f i t , as i n d i c a t e d by tRe R statistic. S t i l l , t h e r e g r e s s i o n c o e f f i c i e n t on y e a r s of s c h o o l completed ( v a r i a b l e 11) i n v i t e s a comparison w i t h t h e r e s u l t s of earlier r e s e a r c h . According t o t h e review a r t i c l e by Lockr.eed, Jamison, and Lau (1980), t h e mean g a i n i n o u t p u t a s s o c i a t e d w i t h one a d d i t i 8 n a l y e a r of s c h o o l completed, i n t h e 3 1 stu&S f o r which t h i s f i g x r e c o u l d be computed, is e i t h e r 1.8 * -. p e r c e n t o r 2.2 p e r c e n t depending on how t h e s t u d i e s a r e weighted. Our own r e s u l t s b r a c k e t t h e computed mean f i g u r e s . The e s t i m a t e d g a i n s i n o u t p u t  Table 6: EPFELTS OF SCllOOL ATTAINMENT AND EXTENSION CONTACT 1 N PRODUCTION FUNCTlON KECRESSIONS - Early pnddy Late paddy When t 12 1-6 yre. of scliool completed ( 0 , l ) 0.054 (0.63) 7 + yre of school completed ( 0 , l ) - 11 (yrs.) Scl~oolnLtuinme~~t Variable 11 (scl~oola t teinment) equurcd 14 Keccnt contact wit11 extension ngent ( 0 , l ) Varlable 13 (7+ yrs. of school) tiuc~ variable 14 (extensiou contact ) 15 Houeeholds i n panchayat with I recent extension contact - - - - - - - - 0.472 0.432 0.473 0.475 (proportlon) - - - - , . - - (2.65) (2.60) (2.83) (2.86) Total number of independent variables i n equation Note: For uucl~crop, rcquatiun (3) i n t l ~ l rtable i s tllu same as equatiur~(3) 111 Tables 5 and 6. Equations (4), ( S ) , and (6) d i f f e r frc~m equntiori (3) only a s eliovl~I ~ e r e ;otlieruise, Lhe varlablea included i n them equationu ure the same so thowe included i n eqtuttiol~(3). Tl~e remaining regression c o e f f i c i e n t s , wl~ichtend t o d i f f e r l ~ a r d l ys t a l l from those i n equation (3) a r e not reported 111 the paper. l l ~ enumbers i n pnrentl~eeesa r e C- valuee. Dashes indicate a variable removed from the equatlon based on an e a r l i e r n u l l r e e u l t .  a s s o c i a t e d w i t h ona a d d i t i o n a l year of schooling a r e s m a l l e r than one p e r c e n t and s t a t i s t i c a l l y n o n s i g n r i c i a n t i n t h e c a s e of b o t h paddy c r o p s , and t h e g a i n e q u a l s 2.3 p e r c e n t i n t h e case of wheat. l o t i n g t h a t t h e r e g r e s s i o n c o e f f i c i e n t s f o r one-co-six y e a r s of school completed i n t h e s t e p (3) e q u a t i o n s a r e a c t u a l l y n e g a t i v e f o r two of i h e t h r e e c r o p s , we decided t o t e s t a q u a d r a t i c s p e c i f i c a t i o n of t h e r e l a t i o n between each of the dependent v a r i a b l e s and s c h o o l a t t a i n m e n t . These r e g r e s s i o n e q u a t i o n s a r e l a b e l e d (EP5), (LPS) , and (WS) . This specification i s an improvement over t h e l o g - l i n e a r s p e . . i f i c a t i o n ( p r i o r e q u a t i o n ) only i n t h e case of wheat. The r e s u l t s f o r wheat may be summarized: which i m p l i e s t h a t t h e marginal p r o d u c t i v i t y of e d ~ c a t i o nchanges from n e g a t i v e t o p o s i t i v e a t 2.7 years of school completed. The f i n a l e q u a t i o n i n Table 6 f o r each of the t h r e e c r o p s employs t h e two school a t t a i n m e n t i n d i c a t o r v a r i a b l e s , plus a v a r i a b l e which i s the product of t h e second of t h e two i n d i c a t o r s ( v a r i a b l e 13) and t h e exrension i n d i c a t o r ( v a r i a b l e 14). The added term does n o t enhance t h e explanatory power of t h e e q u a t i o n e i t h e r i n t h e case of e a r l y paddy o r i n t h e case of r wheat. , t I n t h e c a s e of l a t e paddy, however, t h e n e g a t i v e i n t e r a c t i o n term s u g g e s t s t h a t , f o r t h i s c r o p a t l e a s t , s c h o o l i n g and e x t e n s i o n c o n t a c t s e r v e - * a s s u b s t i t u t e s f o r one a n o t h e 3 i n t h e production f u n c t i o n . Of t h e 37 s t u d i e s reviewed by Lockheed, J a m i s o n r a n d Lau, 1 6 provided i n f o r m a t i o n on nonformal * e d u c a t i o n , and half of t h e s e t e s t e d f o r an i n t e r a c t i o n between nonformal education and schooling. The r e s u l c s of t h e s e s t u d i e s a r e i n c o n c l u s i v e , howerer, some a u t h o r s r e p o r t i n g p o s i t i v e c o e f f i c i e n t s and o t h e r s , n e g a t i v e  coefficients. The q u e s t i o n of whether formal e d u c a t i o n and n o n f o m l educa- t i o n a c t a s complements o r s u b s t i t u t e s , o r whether t h e two a r e independent of one a n o t h e r , reinains very much an open q u e s t i o n . EDUCXT IOlU A\?) TECHNOLOGICAL .ADOPTION T. W. S c h u l t z aad o t h e r s have argued t h a t a l l o c a t i v e s k i l l s make a d i f f e r e n c e only i n a changing eavironment. I n a s t a t i c , t r a d i t i o n a l farm community, w r o t e S c h u l t z (1964), a l l farmers a r e "pocr b u t e f f i c i e n t . " In a dynamic s e t t i n g , however, ; r i c e s f l u c t u a t e and technology improves, f o r e v e r c r e a t i n g o p p o r t u n i t i z s f o r t h e e f f i c i e n t p r o d u c t i o n manager t o i n c r e a s e profits. The Nepal T e r a i i s t y p i c a l -f most contebporary farm communities, where c o n d i t i o n s change r a p i d l y i n l a r g e p a r t w i n g t o t h e e a s e of communica= t i o n w i t h t h e o u t s i d e world. Two r e l a t i v e l y new t e c h n o l o g i e s were i n e v l d e n c e a t t h e t i m e of t h e d a t a c o l l e c t i o n f o r t h i s study. The f i r s t was t h e u s e of store- bought chemical f e r t i l i z e r i n crop production. T h i s p r a c t i c e was s e e n i n t h e p r e v i o u s s e c t i o n of t h e paper t o kave a c o n s i s t e n t l y l a r g e and p o s i t i v e e f f e c t on o u t p u t q u a n t i t i e s . The second i n n o v a t i o n was t h e growing of wheat, a n i n c r e a s i n g l y popular food, which c a n supplement paddy i n t h e fa^^ family's d i e t and can a l s o be s o l d a s a cash crop. p r e s e n t e d h e r e , each of t h e two a d o p t i o n d e c i s i o n s In tht i ~ l y s i s i s treated ds d i s c r e t e and dichotomous. During t h e 1977-78 ' a g k i c i l t u r a 1 g e a r , each of t h e farmers i n t h e T e r a i sample d i d o r d i d n o t apply chemical f e r t i - l i z e r , and each d i d o r did n o t c u l t i v a t e wheat.- - Turning back t o T a b l e 1, w e '9 6 - s e e t h a t 38 p e r c e n t of t h e 683 farmers applied- at l e a s t some storz-bought C . W f e r t i l i z e r , and 71 p e r c e n t c u l t i v a t e d a t l e a s t 5 o m e wheat. The purpose of t h e a n a l y s i s t h a t f o l l o w s is t o s e e what, i f a n y t h i n g , c h a r a c t e r i z e s t h e "early a d o p t e r s , " t h a t i s , t h o s e farm managers who had adopted t h e u s e of chemical f e r t i l i z e r o r t h e c u l t i v a t i o n of wheat a s of t h e 1977-78 season. In particular  w e a r e i n t e r e s t e d i n a s c e r t a i n i n g t h e e x t e n t t o which t h e e d u c a t i o n l e v e l s and c o g n i t i v e s k i l l s of farmers' influence t h e adoption decision, c o n t r o l l i n g f o r ~ c o n o n i cs t a t u s . Data and Methods - T a b l e 7 d e s c r i b e s t h e v a r i a b l e s t o be u s e d i n t h e a n a l y s e s of adopti':e bebsvior. The number of households f o r which we have i n f o r m a t i o n on a l l of t h e 17 l i s t e d v a r i a b l e s i s 458, o: 67 pe::ent of t h e 683 h o u s e h o l d s i n t h e f u l l sample. Again, a 3 w e s a w w i t h t h e c r o p subaamples, v e s e e h e r e t h a t t h e Eean e d l r c a t i o n a l a t t a i n m e n t Ls m a r g i n a l l y h i g h e r i n c h i s subsample t h a n i n t h e f u l l sample, and t h z t a f a m e r i n t h i s subsample is m o d e r a t e l y note l i k e l y co have been exposed t o t h e a g r i c u l t u r a l e x t e n s i o n program ( c f . T a b l e s 1 aad 1 ) . V a r i a b l e s 24 t h r o u g h 27 a r e f o u r measures of what w e have been ' r e f e r r i n g t a as farmer's socioeconomLc s t a t u s ( s e e F i g u r e 1). Under t h i s r - b r i c w e c a n i d e n t i f y a number of economic f a c t o r s e x p e c t e d t o i n f l u e n c e I adoptive behavior. C u r r e n t l a n d h o l d i n g and h o u s e v a l u e a r e measures of 5ousehold w e a l t h and, i n d i r e c t l y , of t h e household's income- earning c a p a c i t y . To t h e e x t e n t t t a t nonadoption (of f e r t i l i z e r o r wheat) r e f l e c t s e i t h e r a c a p i t a l c o n s t r a i n t o r a n a v e r s i o n t o r i s k , w e would p r e d i c t p o s i t i v e e f f e c t s of t h e s e - ~ a r i a b l e so c t h e l i k e l i h o o d of a d o p t i c n . Occupatiofi (i.e., at:-farm anployment) i s a l s o a n i n d i c a t o r of income and, a s s u c h , i t t o o s h o u l d have a p 3 s l : t v e e f f e c t on a d o p t i v e b e h a v t o r . On t h e o t h e r hand, o f f - f a r m employment - nay impede t h e household head f r o n l e a n i n g a b o u t a new a g r i c u l t a r a l e n t e r - p r i s e a c l t h e r e 5 3 r e s u l t i n n o n a d o p t i o n ( o r s i n a d o p t i o n l a t e r t h a n would I o t h e r w i s e have been t h e c a s e ) . i ? i n a l l y , t h e p r e s e n c e of a g r a n a r y o n t h e f a m m y be e x p e c t e d , c e t e r i s p a t i b u s , t o i n c r e a s e t h e p r o f i t a b i l i t y of b o t h i n n o v a t i o n s and t h e r e b y t o i n c r e a s e t h e p r o b a b i l i t y of s d o p t i o n .  - 38 - T a b l e 7: tEAKS AXD STAYDA- DEVIATIOKS, ADAPTXON SUBSSiPLE (k458) Std. Variable Yean Dev. 8 Chemical f e r t i l i z e r (1 i f used, 0 i f n o t ) 0.4:. 0.49 * 9 Wheat c r o p ( 1 i f c u l t i v a t e d , 0 i f n o t ) 0.71 0.46 12 1-6 y e a r s of s c h o o l completed ( 0 , l ) 0.15 0.36 13 7+ y e a r s of s c h o o l completed ( 0 , l ) 0.09 0.28 14 Recent c o n t a c t w i t h e x t e n s i o n a g e n t ( 0 , l ) 15 households i n panchayat w i t h r e c e n t - ? t e n s i o n c o n t a c t (proportion) lb Age ( y e a r s / l O ) 19 Raven's P r o g r e s s i v e ~ Y a t r i c e s( W ) s c o r e (0-36) 20 A g r i c u l t u r a l knowledge test s c o r e (0-12) 24 C u r r e n t l a n d h o l d i n g (ha.) 25 Market v a l u e or' house (Eb./1,000) 26 G r a i n s t o r a g e f a c i l i t y on farm ( 0 , l ) 27 .Occupation t ( f a r m e r only- 0, o t h e r = l ) 0.12 0.32 * . 28 Households i n panchayat growing wheat ( p r o p o r t i o n ) 0.70 0.10 29 Households i n panchayat u s i n g chemical f e r t i l i z e r (proportion) 0.30 0.23 Y - - L? P . J  By d e f i n i t i o n , t h e expected v a l u e of e i t h e r o f t h e dichotomous dependent v a r i a b l e s ( f e r t i l i z e r u s e and v h e a t c u l t i v a t i o n ) s u s t l i e between 0 and 1 r e g a r d l e s s of t h e v a l u e s of t h e independent v a r i a b l e s . The l o g i t model i s one a p p r o p r i a t e t o o l f o r a n a l y z i n g d e t e r m i n a n t s o f a dichotomous dependent v a r i a b l e . The l o g i t model assumes t h a t t h e r e i s a n index, Z , which i s a l i n e a r combination of t h e independent v a r i a b l e s , : Xi The dependent v a r i a b l e , D ( i n t h i s c a s e , a d o p t i o n ) , i s expected t o e q u a l 0 o r 1 depending on whether Z i s g r e a t e r t h a n o r smaller t h a n some t h r e s h o l d value. Over t h e p o p u l a t i o n of i n d i v i d u a l s ( p o t e n t i a l a d o p t e r s ) , t h e t h r e s h o l d v a l u e s a r e assumed t~ be l o g i s t i c a l l y d i s t r i b u t e d , r e f l e c t i n g random d i f f e r e n c e s i n " t a s t e s " . The e s t i m a t e d c o e f f i c i e n t s i n t h e l o g i t a n a l y s i s , t h e biOs, c a n be used t o c a l c u l a t e changes i n t h e p r o b a b i l i t y of a d o p t i o n a s a f u n c t i o n of changes i n t h e v a l u e s of t h e i a d e p e n d e n t v a r i a b l e s . Results The l o g i t r e s u l t s are p r e s e n t e d i n Table 8. - 1/ As v i t h t h e p r o d u c t i o n f u n c t i o n r e g r e s s i o n s i n t h e p r e v i o u s s e c t i o n , t h e independent v a r i a b l e s a r e entered i n a s e r i e s of steps. ,The e d u c a t i o n a l background c h a r a c t e r i s t i c s a r e e n t e r e d f i r s t , f o l l o v e d by t h e fanner's competences and i n f o r m a t i o n i n a second step. The t h i r d k l o c k o f v a r i a b l e s c ~ m p r i s e st h e f o u r measures o f c u r r e n t - I/ The maximum l & l i h o o d estimates o. . e l o g i t parameters were computed on t h e World ~ a n k ' s B7700 computer u s i n g t h e Quail 3.0 package (Berkman, ha - e t a l . , 1977). . + \- h ,  socioeconomic s t a t u s . I n a f o u r t h and f i n a l s t e p i n t h e s e r i e s f o r each dependent v a r i a b l e , a v a r i a b l e i s e n t e r e d t h a t measures t h e e x t e n t of t h e a d o p t i o n of t h i s p a r t i c u l a r i n n o v a t i ~ ni n t h e farmer's own neighborhood ( h i s panchayat). T h i s s t e p t e s t s t h e " d i f f u s i o n " o r " contagion" model of t e c h n o l o g i c a l adoption. X positive coefficient for t h i s variable, other f a c t o r s h e l d c o n s t a n t , s u g g e s t s t h a t a farmer's decision t o adopt an i n n o v a t i o n i s i n f l u e n c e d , i n p a r t , by t h e behavior of h i s neighbors. The r e s u l t s p r e s e n t e d i n Table 8 a r e summarized i n T a b l e 9. We s e e t h a t having a t t e n d e d s c h o o l i s r e l a t e d t o t h e a d o p t i o n of chemical fertilizer. T h i s l i n k a p p e a r s t o be mediated, e s p e c i a l l y a t a h i g h l e v e l ( 7 o r more y e a r s ) of s c h o o l completion, by t h e farmer's w e a l t h , a s measured by farm s i z e ( v a r i a b l e 24). I t seems, however, t h a t t h e r e is no p a r a l l e l e f f e c t of s c h o o l a t t a i n m e n t on t h e d e c i s i o n t o grav wheat. Turning t o t h e e f f e c t of t h e government- run extena i o n program, a farmer who r e p o r t s r e c e n t e x t e n s i o n c o n t a c t ( v a r i a b l e 14) i s somewhat more l i k e l y t h a n a farmer who does n o t , t o b e a n i n n o v a t o r , a l t h o u g h t h i s e f f e c t is statis- - t i c a l l y s i g n i f i c a n t o n l y f o r t h e d e c i s i o n t o grow wheat. I n t h e case of chemical f e r t i l i z e r , i t is not d i r e c t e x t e n s i o n s e r v i c e c q n t a c t ( v a r i - a b l e 1 4 ) b u t , r a t h e r , i n d i r e c t c o n t a c t ( v a r i a b l e 15) t h a t a p p e a r s t o make a difference. I n e i t h e r case, however, t h e s t a % i s t i c a l e f f e c t of t h e 't a g r i c u l t u r a l - e x t e n s i o n program on a d o p t i v e behavlor i s somewhat diminished - I - when, i n s t e p ( 4 ) , a v a r i a b l e is added t h a t m e a G r e s t h e d i f f u s i o n of t h i s i n n o v a t i o n i n t h e farrier's own panchayat. - A farmer is more l i k e l y to' grow wheat o r u s e chemical f e r t i l i z e r t h e g r e a t e r t h e p r o p o r t i o n of o t h e r farmers who do s o i n t h i s farmer's immediate a r e a .  - Table b: C h t M I C U FtiflLlZEd i2;I.I % H U T ChUP LUGIT KLbKESSlUhS Chenical r e r c i l i z e r used !.'heat cro? c u l t i v a t r d Constant 1 2 1-6 y r s of s c l ~ o o lcorn- 0.727 0.598 0.580 0.573 -0.015 -0.088 -0.475 -0.538 l e t e d (6.1) ' (1.92) (1.46) (1.41) (1.41) (-0.04) (-0.20) (-0.98) (-1.10) 13 7+ years o i r .loo1 0.939 0.733 0.472 0.347 0.633 0.689 0.060 -0.102 completed ( 1 ,1) (2.09) (1.36) (0.88) (0.66) (1.04) (1.03) (0.80) (-0.14) lr Kecent concact r i t h 0.4U7 0.374 0.430 0.492 0.853 1.141 1.030 0.873 extension agent ( 0 , l ) (1.01) (0.90) (1.03) (1.19) (1.62) (2.19) (1.84) (1.57) 15 Households i n p a n c h d y ~ t -,it11 recenc extension 1.0~7 1.191 1.356 -1.123 0.425 - - 9 - contact (proportion) ( 1 .C6) (1.18) (1.35) (-0.61) (0.39) - - - 1 3 Kaven's Progressive H a t r i c e s (WPH) s c o r e (0-36) ZU A g r i c u l t u r a l knowledge t e s r s c o r e (0-12) 24 Current landholding (ha.) 0.152 0.148 0.313 0.288 (2.08) (2.17) (2.23) (2.10) 25 tlarket value of -0.055 -0.056 0.058 0.070 house (b./1,0UU (-1.48) (-1.53) (0.89) (1.04) 26 Grain s t o r a g e f a c i l i t y on €arm (0.1) -0.272 (-0.42) - - -0.303 (-0.41) - - 27 Occupation ( f a n n e r only-(I, o t h e r l ) Zb nouseholds i n panchayac - '0.033 growing wheat ( p r o p o r t i o n ) e.26) I 8 29 nouseholds i n panchayat u s i n g - 0.049 chem. f e r t . (proportion) (1.62) :-ore: Lumbers i n parentheses a r e asympcocic t- values. Dashes i n d i c a t e a v a r i a b l e removed from the equation based on a n u l l r e s u l t lr-an e a r l i e r s t e p .  ;able 9: SI;WARY OF EFFECTS XA LOCXT RE'&SSXOYS - - Chemical f e r t i l i z e r s used Wheat c r o p c u l t i v a t e d Variable (CF1) (CF2) (CF3) (CF4) (wC1) (vC2) (UC3) (WC4) Educational Background 12 1-6 yrs. of school com- l e t e d (0.13 ++ + + + 0 0 0 0 13 7+ y e a r s of school completed ( 0 , l ) ++ + 0 0 (+I (+I 0 0 14 Relent c o n t a c t v i t h e x t e n s i o n agent (0.1) (+I 0 (+I (+I + ft ++ + 15 Eouseholds i n pandiayat with recent extension contact (proportion) (+I (+I + 0 0 0 0 0 16 Age ( y n . 1 0 0 0 0 o 0 0 0 Competences and Information 19 Raven's Progressive M a t r i c e s (WH) s c o r e (0-36) 0 0 L 0* O* Of 20 A g r i c u l t u r a l knowledge t e s t s c o r e (0-12) . Current Socioeconomic S t a t u s 24 Current landholding (ha. ++ ft ++ ++ 25 Harket v a l u e of house (Rs. /1,000) 26 Grain s t o r a g e f a c i l i t y on farm ( 0 , l ) 27 Occupation (farmcr only-0, o t h e r l ) Diffusion 28) ?ouseholda i n panehayat g r w l n g wheat ( p r o p o r t i o n ) . 29) Households i n panehayat u s r a g chem. f e r t . ( p r o p o r t i o n ) Note: The symbols i n t h i s t a b l e m y be i n t e r p r e t e d a s f o l l w s : - b ( r e g r e s s i o n c o e f f i c i e n t ) p o s i t i v e and a l g n l f i c a n t a t -05 l e v e l + - i n a one- tailed t e a t ; b p o s i t i v e and s i g n i f i c a n t a t .10 l e v e l i n a one- tailed t e s t ; - + - b p o s i t i v e and s i p i f i c a n t a t .15 l a v e 1 i n a one- tailed t e s t ; 8 0 - n u l l h y p o t h e s i s could not be r e j e c t e d a t .15 l e v e l i n a one- tailed t e s t ( e i t h e r i n t h i s equation, o r i n some p r i o r e q u a t i o n i n vhich c a s e v a r i a b l e v a s excluded from t h i s equation); O* - though not predicted, a n e g a t i v e e f f e c t is suggested by s i z e and s i g n of p a l u e .  The e x t e n s i o n program m y s e r v e as a c a t a l y s t i n t h e d i f f u s i o n process. Extension a g e n t s preach t h e b e n e f i t s of a Pew farm technology, and t h i s promise i s heard and a c t e d upon by t h e a o s t i n n o v a t i v e of t h e area's farmers. Although t h e bulk of t h e area's f a r n e r s assume a more c a u t i o u s , "show-me" p o s t u r e toward ' t h e new technology, n e v e r t h e l e s s , as soon as t h e b e n e f i t s of t h e i n n o v a t i o n have been demonstrated i n p r a c t i c e , some of t h e s e f a r m e r s w i l l a l s o adopt. A s t h e evidence c o n t i n u e s t o accumulate, f u r t h e r a d o p t i o n t a k e s p l a c e , f i r s t a t a n i n c r e a s i n g r a t e , and t h e n , when some m a j o r i t y of f a r m e r s are a l r e a d y u s i n g t h e new technology, perhaps a t a d e c r e a s i n g r a t e . L/ I n g e n e r a l , t h e measured c o g n i t i v e outcomes of e d u c a t i o n (va ri- a b l e s 1 7 , 19, and 20) a p p e a r t o have o n l y weak e f f e c t s o n t h e d e c i s i o n s t o a d o p t chemical f e r t i l i z e r and wheat c u l t i v a t i o n . The l o g i t c o e f f i c i e n t f o r t h e farmer's RPM s c o r e ( v a r i a b l e 1 9 ) , o u r measure of g e n e r a l r e a s o n i n g a b i l i t y , even d i s p l a y s t h e "wrong" s i g n i n t h e case of wheat c u l t i v a t i o n . The c o e f f i - c i e n t f o r numeracy ( v a r i a b l e 1 7 ) always h a s a p o s i t i v e s i g n as p r e d i c t e d , but i t is s t a t i s t i c a l l y s i g n i f i c a n t o n l y f o r wheat adoption. - I/ Cf. Rogers (1971).  - - Seferences Baidya, B. G., E. C. Chou, D. T. Jamison, P. R. Xoock, and R. P. S h r e s t h a . 1980. 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Economics & E d u c a t i o n Review 1 ( S p r i n g ) : 225-244.  POPULATION & FiEWCY 2ESClJRCES DIVISION DISCUSSION PAPEaS [A * by t h e number i n d i c a t e s t h e paper i s Bank-confidential o r o t h e r v i s e r e s t r i c t e d . ] 81-1 Oey A. Meesook, 'Demographic C h a r a c t e r i s t i c s of I n d i v i d u a l s and t h e Yeasuremtst of Lifetime Income". February 1981. 81-2 Susan H. Cochrane, 'The Economics of F e r t i l i t y v i t h Examples from Asia". February 1981. 8 Rashid Faruqee, " Social I n f r a s t r u c t u r e and S e m i c e s i n Zimbabwe'. February 1981. 81-4* Richard Sabot, A. Berry, A. Eiazlewood, J. Knight, J. Armitage and M. Boissiere, 'Cognitive S k i l l s : T h e i r Determinants and Influence on Earnings i n Tvo Poor Urban Economies.' February 1981. 81-5 . Jamison, Barbara S e a r l e , Stephen Heyneman, and Klaus Galda Dean T "Improving Elementary Hathematics Education i n Bicaragua: An Experimental Study of t h e Impact of Textbooks a d Radio on Achievement". a r c h 1981. 81-6 Rashid Paruqee, 'Analyzing t h e Impact of Health S e m i c e s : Narangwal and Other Experiences". March 1981. 81-7 J. B. Knight and R. 8. Sabot, 'Labor a r k e t Discrimination i n a Poor Urban Econoa~y". Karch 1981. 81-8 Oey A. Fkesook, " I n t e r r e l a t i o n s h i p s between Demographic Factors and Income D i s t r i b u t i o n : Problems of Measurement, Description and Interpretation'. A p r i l 1981. 81-9 Susan 8. Cochrane, Ninnala J o s h i and Kalpana Nandvani, " F e r t i l i t y A t t i t u d e s and Behavior i n the Nepal Terai". A p r i l 1981. J.B. Knight and Richard Sabot, "The Role of t h e Firm i n Wage Detarniination: An African Case Study". A p r i l 1981. J.B. Knight and Richard Sabot, "The Returns t o Education: Increasing with Experience o r Decreasing with Expansion?". March 1981. J.B. Knight and Richard Sabot, 'From Xigrants t o P r o l e t a r i a n s : Employment Experience, Mobility and Wages i n Tanzania". March 4981. I A. Berry and Richard Sabot, "Unemployment and E c o n d c Development". April 1981. Rashid Faruqee and Ethna Johnson, "Health, N u t r i t i o n and Family Planning: A Survey of Experiments and S p e c i a l P r o j e c t s i n India" . April 1981. 81-15 Francois Orivel and Dean T. Jamison, "The Cost-Ef f ectivenesa of Dj.stance Teaching Projects" . June 1981 81-16 Richard Sabot, "Labor Force Growth. Employment and Earnings i n Egypt: 1966-1968'. % . y 1981. 81-17 K.C. Zachariah, "Anomaly o f t h e F e r t i l i t y Decline i n Kerala: S o c i a l Development, Agrarian Ekforss, o r t h e Family Planning Program". . 1%~ 1981. 81-18 Richard Sabot, A. Berry, A. Hazlevood, J. Knight, P. C o l l i e r , J. Armitage, M. B a i s s i e r e , "Education Expansion and Labor S r k e t Adjuetment i n Fdnya a d Tanzania - A Background Paper'. 'Hay 1981. 1 81-19 Nancy B i r d s a l l and Oey Meesook, "Child Schooling, Number of Children and I n t e r g e n e r a t i o n a l Transmission of I n e q u a l i t y : A Simulation". Hay 1981- - 81-20 Francois O r i v e l , "The -act of -Agricultural Extension Services: A Reviev of t h e L i t e r a t u r e " . J u l y 1981. Also a v a i l a b l e i n French a s "L'impact d e s S e r v i c e s d e Vulgarisation Agricole: Xevue de l a LittBrature' . 81-21 . L o d s e Fox, W Nancy B i r d s a l l and H ' hy Earn Xore: Location, Job Preferences and Job Discrimination Among B r a z i l i a n Schoolteachers". Hay 1981. 81.-22 Althea H i l l , "The Demographic S i t u t a t i o n i n Sub-Saharan Africa: A Discussion Paper". Hay 1981. 81-13 R. Sabot, A. Berry, A. Eazlevood, J. Knight, J. Annitage, M. B o i s s i e r e "Does t h e Erpansion of Education Campress t h e S t r u c t u r e of Wages and Reduce t h e I n e q u a l i t y of Pay? A Preliminary Analysis'. J u l y 1981. $1-24* Nancy B i r d s a l l and Dean T. Janisan. "Incrc9rre and Other Factors Influencing F e r t i l i t y and M o r t a l i t y i n China". October 1 9 8 L 81-25* Nancy B i r d s a l l , Sulekha P a t e l and K. C. Zachariah, " A l t e r n a t i v e P r o j e c t i o n s of t h e Chinese Popclation" . I .June 1981. 5 81-26* Dean T. Jamison, T.J. Ho, and F.L. Trowbridge. "Food A v a i l a b i l i t y and t h e N u t r i t i o n a l S t a t u s o f Children i n China-. September 1981. L 81-27* Dean T. Jamison. "Child H a l n n t r i t i o n and School Retardation i n China". September 1981. '? 81-28 Deborah Lhamon ~ a c m i ~ l a n .l a n g u a g e P o l i c i e s f o r African Primary Education: ~ u m m a e o f t h e Anglophone Research L i t e r a c s r e . " J u l y 1981. 81-29 Tania Thevenin. "Les I m p l i c a t i o n s Peaagogiques d e s P o l i t i q u e s d e langues dans l'enseignement en Afrique: Une revue de 1 c l i t t e r a t u r e Francophone". June 1981. Also a v a i l a b l e i n English a s "Pedagogical Implications of Language Policy i n African Schools: A Reviev of t h e Francophone Literature'. 81-30 Vicente Paqueo. "A Household Production Hodel of School Zilrollment: A P r o b i t Analysis of t h e 1978 Bicol Xultipurpose Survey Data". June 1981 Bryan L. Boulier and Vicente B - Paqueo. "On t h e Theory and Xeasurements of t h e Determinants of Xortalit;'. June 1981 Reynaldo Martorell. " N u t r i t i o n and Bealth S t a t u s I n d i c a t o r s : Suggestions f o r Surveys of t h e Standard of Living i n Developing Countries". . Juae 1981. R. Sabot, A. Berry, A. Eazelwood, 3. Knight, 3. Armitage, and H. Boissiere. " Correlates of Educattonal Attainment i n Tanzania". J u l y 1981- Susan H. Cochrane. "The DeterPinants of F e r t i l i t y and Child Survival i n t h c Nepal Terai". J u l y 1981. Joanne L e a l i e , Z .G. Baidya, and R. Yandwani. "Prevalence and C o r r e l a t e s of Childhood M a l n u t r i t i o n i n t h e T e r a i Region of Nepal". J u l y 1981. R. Mansell Prothero. "Perspec=ives on Population Mobility i n West Africa". August 1981. Timothy King. " Population Growth, I n t e r n a t i o n a l Resource Transfers, and I n t e r n a t i o n a l Migration". August 1981 Timothy King. "Inmigration from Developing Countries: Some Philosophical Issues" . August 1981. R. Sabot and 3. e i g h t . "Why Wages Differ: Earnings Functions i n a Poor Urban Economy". Auguat 1981. Joao B a t i s t a d e Araujo e O l i v e i r a and Francois Orivel. "In- Service Teacher Training System: Logos 1 1 i n Brazil" . Bugcat 1981. a , I R. Sabot, A. Berry, A. Hazlewood, 3. e i g h t , 3. Armitage and If. Boissiere. " Correlates of Educational Attainment i n Kenya". August 1981. - - P e t e r Fallon. -"Incomes, Poverty and Income ~ i s t r f b u t i o ni n Rural Botswana: A Synthesis of Evidence Based on the-Rural Income D i s t r i b u t i o n Survey." Septeiuber 1981. - * Barbara Watanabe and Eva Mueller. "A Poverty p r o f i l e f o r Rural Botawana." Octobar 1981. Eva Mueller. "The Value and Allocation of T h e i n Rural Botcaana." November 1981.  Robert E.B. Lucas. "The D i s t r i b u t i o n and E f f i c i e n c y of Crop Production i n T r i b a l Areas of Botswana." September 1981. Robert E.B. Lucas. "The D i s t r i b u t i o n of Wages and Employment i n Rural Botswana." September 1981. Dov Chernichovsky. "Socioeconodc.and Demographic Aspects of School Enrollment and Attendance i n Rural Botswana." October 1981. Dov C::etnichovsky. " S o c i o e c o n d c C o r r e l a t e s of F e r t i l i t y Behavior i n Rural Botswana." October 1981. S h e r r i Kossoudji a.1' Eva Mueller. "The Economic and Demographtr . S t a t u s of Female deaded Households i n Botswana." October 1981. Francois O t i v e l . "La Tbl6wision S c o l a i r e du S6nBgal: Evaluation Economique e t Perspectives." Aout 1981. (Summary a v a i l a b l e i n English. ) H i l l a r y P e r r a t o n , Dean T. Jamison and Francois Orivel. " Mass Media f o r A g r i c u l t u r a l Extension i n Malawi". :eptembe= 1981 Thomas W. Merrick. "The Impact of Access t o Piped Water on I n f a n t H o r t a l i t y i n Urbar. B r a z i l , 1979 t o 1976." Auguat 1981. 81-53 N. Krishnan Namboodiri. ^Determiaants of ? e r t i l i t y i n S r i Lanka." September 1981. 81-54 N. Krishnan Narnboodiri. "Age a t Marriage i n S r i Lanlca." October 1981- 81-55* R. Sabot, A. Berry, A. Hazlewood, J. Knight, J. L . t a g e , M. B o i s s i c r r - "The S t r u c t u r e of Wages i n Kenya and Tanzanis: What Role Has Pa? Policy Played?" October 1981. 81-56* R. Sabot, A. St+, A. Hazlewood, J. Knight,' J. Atmftage, M . Boissiere- "Wage D y n d c s i n Tanzania and Kenya: P o l i c y Simulations." October 1981. 81-57 3 Cheruichovsky and Oey A. Heesook. "Female Labor Force P a r t i c i p a t i o n - n Indonesia." October 1951. Chernichovsky and Oey A. Meeeook. "Poverty i n Indoensia: A rof i l e . " November 1981. 81-59 Suaan H . Cochrane and Kalpara Nandwani. "The Determiaauts of F e r t i l i t y i n 22 V i l l a g e s of Northern Z .ailand." December 1981. 81-60 Dean T . Jamison and P e t e r R. Moock. "Farmer Education and Farm E f f i c i e n c y i n Nepal: The Role of Schooling, E x t e l s i o n S e r v i c e s , and Cognitive S k i l l s . " December 1981.