Education and agricultural efficiency in Nepal

T h i s series of u n r e f e r r e d d i s c u s s i o n papers is intended t o provide an 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 the a u s p i c e s o f t h e P o p u l a t i o n and &man Resources D i v i s i o n . The c o n c l u s i o n s and v i e v s expressed i n t h i s p a p e r a r e t h o s e of t h e a u t h o r and do n o t n e c e s s a r i l y r e f l e c t t h o s e of t h e World Bank Group. The paper i s a d r a f t f o r d i s c u s s i o n , and comments a r e welcome. 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 Paper No. 82-3 EDUCATION AND AGRICULTURAI. EFFICIENCY I N NEPAL J a n u a r y 1982 9. i i , i i Prepared by: . I L 1! , Som P u d a s a i n i , Unj.vertii:y of Minnesota - C - -3 This paper i s based on t h e author's Ph.D. d i s s e r t a t i o n a t t h e U n f v e r s i t y of ~Ylnnesota, and i t s p r e p a r a t i o n was supported by DEDPH. I t w a a prepared - i n c o a j u n c t i o n w i t h World Bank Research P r o j e c t RPO 671-49, " ~ d u & t i o n and Xural ~ e v e l o & e n t i n Thailand and Nepal ". - The World Bank Washington, D.C. 20433 U. S . A .  ABSTRACT T h i s s t u d y examines i f education (and e x t e n s i o n ) has h t g h e r c o n t r i - b u t i o n t o a g r i c u l t u r a l p r o d u c t i v i t y ( o u t p u t ) i n a modernizing economic environment t h a n i n a t r a d i t i o n a l a g r i c u l t u r e and i f e d u c a t i o n enhances t h e p r o d u c t i v i t y growth through i t s workers a n d / o r a l l o c a t i v e e f f e c t s i n t h o s e environments. I n a d d i t i o n , i t a l s o examines i f e d u c a t i o n and v a r i - a b l e s such a s farm revenue, modern i n p u t u s e ofLchild m o r t a l i t y a r e i n - t e r r e l a t e d . Data gathered by i n t e r v i e w i n g 205 f a n n e r s of modernizing t e r a i r e g i o n (Bara D i s t r i c t ) and 149 f a r m e r s of t r a d i t i o n a l h i l l r e g i o n (Gorkha D i s t r i c t ) a r e u t i l i z e d . P r o d u c t i o n and p r o f i t f u n c t i o n s a r e em- ployed i n a d d i t i o n t o t a b u l a r a n a l y s i s t o a t t a i n t h e o b j e c t i v e s . Evidence from t h i s s t u d y s u p p o r t s t h e c o n t e n t i o n t h a t e d u c a t i o n h a s a much h i g h e r c o n t r i b u t i o n t o t h e o u t p u t i n n o d e r n i z i n g t e r a i than i n t h e more t r a d i t i o n a l h i l l r e g i o n . Worker and a l l o c a t i v e a f f e c t s p o s i t i v e l y c o n t r i b u t e t o t h e o u t p u t i n b o t h r e g i o n s . Extension has no s i g n i f i c a n t impact on o u t p u t i n e i t h e r r e g i o n . Education and e x t e n s i o n a r e weak sub- s t i t u t e s i n farm d e c i s i o n making p r o c e s s i n t h e t e r a i , w h i l e t h e e f f e c t of t h e i r i n t e r a c t i o n is ambiguous i n t h e h i l l . Education and farm revenue, and e d u c a t i o n and modern i n p u t u s e a r e p o s i t i v e l y r e l a t e d i n b o t h r e g i o n s . However, e d u c a t i o n and u s e of modern i n n o v a t i o n s a r e much s t r o n g l y cor- r e l a t e d i n t h e t e r a i than i n t h e h i l l region. Child m o r t a l i t y and edu- c a t i o n , on t h e o t h e r hand, a r e i n v e r s e l y r e l a t e d i n b o t h r e g i o n s .  TABLE OF CONTENTS INTRODUCTION I LITERACY AND INVESTMENT I N EDUCATION 4 STUDY AREAS AND SAMPLE CHARACTERISTICS THE HODEL P r o d u c t i o n F u n c t i o n Model P r o f i t F u n c t i o n Model THE EMPIRICAL FINDINGS R e l a t i o n s h i p Between Education and Other V a r i a b l e s P r o d u c t i o n F u n c t i o n E s t i m a t e s , N l o c a t i v e and Worker E f f e c t s of Education A l l o c a t i v e and T e c h n i c a l E f f i c i e n c i e s of E d u c a t i o n From P r o f i t F u n c t i o n A g r i c u l t u r a l P r o d u c t i v i t y i n Modernizing and T r a d i t i o n a l Environments APPENDICES 39 I Primary L e v e l S c h o o l s , Teaching S t a f f and Enrollment i n Nepal I1 Secondary L e v e l Teaching S t a f f and Enrollment i n Nepal I11 *Higher L e v e l Teaching Staf,f and Enrollment i n Nepal IV The T h e o r e t i c a l A s p e c t s of t h e P r o d u c t i o n Function Model REFERENCES -  EDUCATION AND AGRICULTURAL PRODUCTION EFFICIENCY I N NEPAL BY Som Pudasaini An important reason f o r low a g r i c u l t u r a l p r o d u c t i v i t y growth and t h u s , i n t u r n , a s l u g g i s h pace of economic development i n developing c o u n t r i e s is suggested t o be a low l e v e l of i n t r o d u c t i o n of modern a g r i - c u l t u r a l technology and a l a c k of s u b s t a n t i a l investment i n human c a p i t a l development ( S c h u l t z , 1964). It h a s been suggested f u r t h e r t h a t educat5on has s u b s t a n t i a l c o n t r i b u t i o n t o p r o d u c t i v i t y o r output i n farming a r e a s 1/ c h a r a c t e r i z e d by changing technology- (Nelson and Phelps, S c h u l t z , 1975) and t h a t e d u c a t i o n c o n t r i b u t e s t o a g r i c u l t u r a l ~ r o d u c t l o nthrough t h e worker and a l l o c a t i v e e f f e c t s (Welch). I n l i g h t of t h e above s u g g e s t i o a s , s e v e r a l e m p i r i c a l q u e s t i o n s arise: Does e d u c a t i o n have h i g h e r contribu- t i o n t o t h e o u t p u t i n modernizing a g r i c u l t u r a l environments than i n tra- ditional areas? Which e f f e c t of education c o n t r i b u t e s s i g n i f i c a n t l y t o t h e output i n modernizing and t r a d i t i o n a l environments? Do t h e e d u c a t e d farmers a t t a i n h i g h e r economic e f f i c i e n c y r e l a t i v e t o t h e i l l i t e r a t e s iai one o r both environments? Is t h e r e any p o s i t i v e c o r r e l a t i o n betveen eats- c a t i o n and farm income o r modern innbvation? The e m p i r i c a l answers t o t h e s e q u e s t i o n s have i m p o r t a n t p o l i c y irnplicat ions i n economic development - planning and r e s o u r c ~ a l l o c a t i o ni n e d u c a t i o n and a g r i c u l t u r a l i n n o v a t f a n s - L . - r The a u t h o r g r a t e f t l l y acknowledges t h e h e l p f u l comments of Vernon R u t t a n a t v a r i o u s s t a g e s of t h e development of t h i s paper and is indehted to W i l l i s P e t e r s o n f o r h i s comments on an e a r l i e r d r a f t . - 1 / I n a broader s e n s e education can be argued t o have h i g h e r payoff i n any d i s e q u i l i b r i u m s i t u a t i o n s r e g a r d l e s s of whether t h e d i s e q u i l i b ~ u m a r i s e s a s a r e s u l t of changes i n technology, market c o n d i t i o n s o r weether s i t u a t i o n s .  i n t h e developing countries. S t u d i e s conducted i n b o t h t h e U.S. ( G r i l i c h e s , G i s s e r , Fane, Huffman, Khaldi) and t h e developing c o u n t r i e s (Chaudhari, Halim, P u d a s a i n i , 1979, Wu) have e m p i r i c a l l y e s t a b l i s h e d t h e impcrtance of e d u c a t i o n i n a moder- nizing agriculture. Of t h e s t u d i e s , Huffman and Wu a l s o attempted t o d e t e r m i n e t h e r e l a t i v e s i g n i f i c a n c e of t h e worker and a l l o c a t i v e e f f e c t s i n t h e modernizing environment. T h e i r f i n d i n g s c o n f l i c t w i t h each o t h e r s i n c e Huffman r e p o r t s t h e g r e a t e r importance of t h e a l l o c a t i v e e f f e c t while Wu f i n d s t h e worker e f f e c t t o s u r p a s s t h e a l l o c a t i v e e f f e c t . N o n 2/ e t of t h e s t u d i e s , however, e x p l i c i t l y compared t h e impact of e d u c a t i o n i n t e c h n o l o g i c a l l y changing and t r a d i t i o n a l a g r i c u l t u r a l environments t o permit t o draw any meaningful c o n c l u s i o n c o n c e r n i n g t h e d i f f e r e n t i a l yay- o f f of e d u c a t i o n i n changing and t r a d i t i o n a l a g r i c u l t u r a l environments. T h i s s t u d y i s i n i t i a t e d w i t h f i v e main o b j e c t i v e s . The f i r s t is t o examine i f t h e r e is any r e l a t i o n s h i p between e d u c a t i o n and o t h e r f a c t o r s such a s farm income, modem i n p u t u s e , o r c h i l d m o r t a l i t y . The second i s t o i n v e s t i g a t e whether e d u c a t i o n c o n t r i b u r e s t o t h e o u t p u t through t h e worker a n d / o r a 1 . l o c a t i v e e f f e c t s i n t h e modernizing and t r a d i t i o n a l en- vironments. The t h i r d is t o test t h e c o n t e n t i o n t h a t e d u c a t i o n h a s a C . e s u b s t a n t i a l l y h i g h e r c o n t r i b u t i o n t o t h e o u t p u t i n a changing a g r i c u l t u r a l environment t h a n i n more t r a d i t i o n a l a r e a s . Fourthly, i t is t o d e t e r m i n e i i f e d u c a t i o n and extensior, a r e s u b s t i t u t e s i n thee%arrn d e c i s i o n making B r - w'' 1 A s t u d y t h a t sheds l i g h t on t h i s i s s u e is a s u r v e y of l i t e r a t u r e from t h e d e v e l o p i n g c o u n t r i e s (Lockheed, Jamison and Lau) which r e p o r t s a much h i g h e r c o n t r i b u t i o n of e d u c a t i o n t o o u t p u t i n a modernizing environment t h a n i n a t r a d i t i o n a l a r e a .  process. L a s t l y , i t is to t e s t i f the eclucated farmers i n one or both environments possesses i r t g l e r economic e f f i c i e n c g l r e l a t i v e t o t h e i l l i t e r a t e s and determine i f production and p r o f i t f u n c t i o n s g i v e s i m i l a r r e s u l t s concerning t h e impact of education. Bara d i s t r i c t i n t h e c e n t r a l t e r a i is s e l e c t e d t o r e p r e s e n t t h e L .. modernizing t e r a i region and Gorkha d i s t r i c t i n t h e western h i l l is cho- i b 1 sen t o r e p r e s e n t t h e r e l a t i v e l y t r a d i t i o n a l h i l l region. Production and P p r o f i t f u n c t i o n models a r e employed i n a d d i t i o n t o t a b u l a r a n a l y s i s to a t t a i n the stipulated objectives. P This paper is divided i n t o f i v e s e c t i o n s . The f i r s t provides a I glimpse of t h e l i t e r a c y r a t e and investment in education in Nepal. The k second d e s c r i b e s t h e sample and i t s c h a r a c t e r i s t i c s . The t h i r d d i s c u s s e s t h e models (production and p r o f i t f u n c t i o n s ) employed i n t h i s study. The fourth r e p o r t s the empirical r e s u l t s . F i n a l l y , concluding remarks a r e presented. 3/ Economic e f f i c i e n c y c o n s i s t s of two coinponents: t e c h n i c a l and a l h - i ' s i c a t i v e e f f i c i e n c i e s . ,Education c o n t r i b u t e s t o a g r i c u l t u r a l o u t p u t .- - * by enhancing t e c h n i c a h and /or a l l o c a t i v e e f f i c i e n c y of farm p r o d u c e r s . The t e c h n i c a l e f f i c i e n c y improving e f f e c t of education i s g e n e r a l l y P ! c a l l e d t h e worker e f f e c t while t h e a l l o c a t i v e e f f i c i e n c y enhancing e f f e c t is know as a l l o c a t i v e e f f e c t (welch). The terms worker e f f e c t and t e c h n i c a l e f f i c i e n c y , and a l l o c a t i v e e f f e c t and a l l o c a t i v e e f f i - ciency a r e interchangeably used i n t h i s study.  I. LITERACY AND INVESmENT I N EDUCATION A g r i c u l t u r e i s t h e most v i t a l s e c t o r i n Nepal, where i t provides employment t o more than 90 p e r c e n t of t h e populace and c o n t r i b u t e s more than 60 p e r c e n t t o t h e g r o s s domestic product and more than 70 percent t o t o t a l export. Despite i t s v i t a l r o l e i n the o v e r a l l development of t h e economy, t h e a g r i c u l t u r a l seccor i n Nepal has remained t r a d i t i o n a l and E subsistence. An important reason f o r i t s s t a g n a t i o n i s b e l i e v e d t o be a F t 1 l a c k of s u b s t a n t i a l investment in human c a p i t a l i n a d d i t i o n t o a l o w l e v e l I E of t e c h n o l o g i c a l innovation. A meager 5.1 percent l i t e r a c y r a t e in 1952/54 and an 8.8 p e r c e n t l i t e r a c y r a t e i n 1961 appears t o r e i n f o r c e t h e p l a u s i - b i l i t y of t h e above argument (Table 1) . With t h e growing awareness of both t h e v a l u e of education and low p r o d u c t i v i t y of a g r i c u l t u r e , Nepal s t a r t e d i n v e s t i n g i n c r e a s i n g amounts of r e s o u r c e s i n education, beginning i n t h e mid-1960's (Table 2 ) . The l e v e l of p u b l i c spending i n education r a p i d l y expanded during t h e 1970's. Consequently, t h e number of i n s t i t u t i o n s ( s c h o o l s , c o l l e g e s and univer- s i t i e s ) , teaching s t a f f and p u p i l s d r a m a t i c a l l y i n c r e a s e d i n primary, secondary and h i g h e r l e v e l s during t h e l a s t decade (Appendix I t o 111). These e f f o r t s r a i s e d the o v e r a l l l e v e l of l i t e r a c y from 8.8 percent i n I t 1961 t o 19.2 p e r c e n t in 1975. The l i t e r a c y l e v e l of t h e female populatfon i n c r e a s e d from 1.5 t o 5 percent and t h a t of t h e male population r o s e from 16.7 t o 3 3 . 4 p e r c e n t over t h e same period. However, t h e l e v e l of growth of p u b l i c investment- in education and I t h e i n c r e a s e i n t h e number of l i t e r a t e man power was n u t uniformly d i s t r i - buted through- out t h e country during t h e period. The l e v e l of investment  Table 1. L i t e r a c y r a t e of t h e p o p u l a t i o n 15 y e a r s of age and o l d e r , Nepal. Year - -- Tot a1 Percent L i t e r a t e Male Female L Source: Adapted from UNESCO, S t a t i s t i c a l YeBrbook, 1963, 1967, 1977. ! t t T a b l e 2. P u b l i c e x p e n d i t u r e s on e d u c a t i o n i n Nepal. f ! Expenditures as P e r c e n t of k Gross E x p e n d i t u r e s (1,000 r u p e e s ) domes t i c Total public Year Recurring Capital Total product expenditures 1953 N. A. N.A. 3,656 N.A. N.A. 1962 19,775 9,559 29,334 N.A. N.A. C 1967 43,500 N.A. 43,500 0.6 6.5 - 1973 - N.A. N.A. 115,400 1.0 10 .O L i- 1974 , * N.A. N.A. 139,700 N.A. 11.4 - 1 i 1975 201,776 27,687 229,463 1.5 12 .O B I Source: UNESCO, S t a t i s t i c a l Yearbook, 1963, 1967, 1975, 1976, 1977- N.A. = n o t a v a i l a b l e U.S. $1 = RS12.00  val.leys) than i n t h e h i l l r e g i o n u n t i l e a r l y s e v e n t i e s . Given t h e low l e v e l of l i t e r a c y in g e n e r a l and e x i s t i n g d i s p a r i t y between t h e r e g i o n s , t h e Nepalese government i n i t i a t e d "The new education plan" i n 1971 v i t l l t h e o b j e c t i v e of providing b e t t e r e d u c a t i o n a l o p p o r t u n i t i e s t o t h e people of a l l regions. Consequently, e d u c a t i o n a l s t a t u s of t h e h i l l r e g i o n has been improving s i n c e then even though t h e r e has been no p e r c e p t i b l e improvement i n t h e t e c h n o l o g i c a l s t a t u s of t h e region. On t h e o t h e r hand, both t h e t e c h n o l o g i c a l and e d u c a t i o n a l s t a t u s of t h e t e r a i (and v a l l e y ) r e g i o n has been improving f o r over a decade. L i t e r a t u r e s u g g e s t s t h a t education s i g n i f i c a n t l y enhances farmers' t e c h n i c a l and a l l o c a t i v e a b i l i t y , and thus enables them t o a t t a i n rmtch 1 i h i g h e r output i n t e c h n o l o g i c a l l y advancing a g r i c u l t u r e a r e a s than in a Y i t r a d i t i o n a l area. There a r e no sound empirical evidence a v a i l a b l e a t I 1 p r e s e n t t o s u p p o r t o r r e j e c t t h e f i n d i n g s i n t h e context of Nepal. This paper is t o i n v e s t i g a t e t h e c o n t e n t i o n t h a t farmers' education has sub- s t a n t i a l l y h i g h e r payoff i n modernizit~gt e r a i t h a n r e l a t i v e l y t r a d i t i o n a l h i l l region. I f t h e e m p i r i c a l evidence from t h i s study v a l i d a t e s t h e c o n t e n t i o n , i t would mean t h a t t h e a g r i c u l t u r a l p r o d u c t i v i t y growth i n Nepal can be a c c e l e r a t e d by simultaneously i n v e s t i n g in t h e improvement C of both farm technolugy and human c a p i t a l than e i t h e ; one s e p a r a t e l y .  11. STUDY AREA AND SAMPLE CHARACTERISTICS I n a broad s e n s e , Nepal can be divided i n t o two d i s t i n c t geographic regions - namely, t h e t e r a i and t h e h i l l - for t h e purpose of t h i s study. The fl.at and warm southern a r e a of t h e country is know a s t h e t e r a i regiari, w h i l e t h e r e l a t i v e l y c o o l and h i l l y ( o r mountainous) middle and n o r t h e r n p a r t of t h e country can b e c a l l e d t h e h i l l region. The t e r a i r e g i o n h a s been experiencing g r a d u a l improvement i n technology and education over a decade while a major p a r t of t h e h i l l region (except t h e v a l l e y s ) has remained r e l a t i v e l y t r a d i t i o n a l even though t h e r e has been improvement i n i t s e d u c a t i o n a l s t a t u s d u r i n g t h e l a s t decade. To determine t h e impact of education i n t h e modernizing t e r a i and t r a d i t i o n a l h i l l , Bara d i s t r i c t i n t h e c e n t r a l t e r a i i s s e l e c t e d t o re- p r e s e n t t h e t e r a i region and Gorkha d i s t r i c t i n t h e western h i l l is c h o s e . ! i 41 t o represent the h i l l r e g i o r r . Micro- level, c r o s s - s e c t i o n a l d a t a a r e ! I c o l l e c t e d by interviewing 205 randomly s e l e c t e d farmers of Bara and 149 i ! farmers of Gorkha d i s t r i c t s f o r t h e crop y e a r 1979-80 ( s e e P u d a s a i n i , i I 1981 f o r d e t a i l e d d a t a c o l l e c t i o n methods). ! Underlying t h e s e l e c t i o n of t h e d i s t r i c t s a r e two c r i t e r i a : (1) re- p r e s e n t a t i v e n e s s and ( 2 ) l e v e l of t e c h n o l o g i c a l innovation. . * i Rice i s t h e most important crop i n Bara, a s i t is i n t h e t e r a i re- i. gion a s a whole. GLUC~ cop In Gorkha, a s i t ,-@+,# - - iiin the -9 h i l l region- as a whole. Gorkha d i s t r i c t , r i s i n g i r o n low, h i l l y a r e a s - 4/ Thus, t h e terms Bara d i s t r i c t and t e r a i r e g i o n , and Gorkha d i s t r i c t and h i l l region a r e interchangeably used i n t h i s study.  up t o high, mountainous r e g i o n s , has been almost untouched by modern i n p u t s (HYV seed, f e r t i l i z e r , p e s t m . c i d e s , machines) and p r a c t i c e s , a s is t h e ma- j o r p a r t of t h e t e r a i region. On t h e o t h e r hand, Bara d i s t r i c ~i n t h e w a r n p l a i n s has been experiencing g r a d u a l introduczion of modern i n p u t s and prac- t i c e s f o r over a decade, as i s t h e major p a r t of t h e t e r a i region. Thus, t h e two d i s t r i c t s a r e expected t o provide a congenial s i t e f o r a n a l y z i n g t h e impact of education (and extension) on t r a d i t i o n a l ( h i l l ) and modern- ! i i z i n g ( t e r a i ) environments, r e s p e c t i v e l y . Important c h a r a c t e r i s t i c s of t h e sample farmers of t h e t e r a i (Bara) 1 and h i l l (Gorkha) r e g i o n s ( d i s t r i c t s ) a r e r e p o r t e d i n Table 3. The farm operat,orsV of t e r a i region has an average education (schooling) of 5.04 y e a r s and t h e o p e r a t o r s of t h e h i l l regi.on has an average education of 4 - 1 8 years. The t e r a i farmer had about f o u r c o n t a c t s with ail extension agent during t h e y e a r under study, w h i l e t h e farm producers i n t h e h i l l had o n l y about one c o n t a c t d u r i n g t h e same period. The t e r a i farmers s p e n t RS 3,002 p e r farm o r RS 410 Fer bigha on modern i n p u t s (HYV seed, f e r t i l i z e r , pes- t i c i d e s ) w h i l e t h e sample farmers i n t h e h i l l used modern i n p u t s worth RS 170 per iarm o r RS 155 per bigha. Mechanical i n p u t s such a s t r a c t o r and pumpset a r e employed by t h e a g r i c rs in the t e r a i w h i l e no such innovation a r e u t i l i z e d by t h e h i l l f a r s e r s . This demonstrates * t h a t t h e t e r a i farmers employ almost t h r e e times a s much of t h e modern i n p u t s a s t h e h i l l farmers while t h e t e r a i farmerc a r e only s l i g h t l y more educated than t h e i r h i l l c o u n t e r p a r t s . The farmers of t h e t e r a i region hav6 much l a r g e r holdings and c u l t i - ? vated a r e a s than t h o s e i n t h e h i l l regia;. The sample farm o p e r a t o r s of oEh regions, on t h e o t h e r hand, have s i m i l a r age and farmlng experience, The h i l l f a r m e r s , however, have much l a r g e r investments i n l i v e s t o c k than their t e r a i counterparts. - - -- - - -- . . . - - - -- --  - 9 - Table 3. Characteristics of sample farmers of Terai and Hill regions, Nepal. Terai Bill Characteristics (Baraj (Gorkha) = 5 N . , 1 9 Operator's education (yrs .) 5.04 4.18 (3.73) (3.53) Extension contact (no) 3.93 0.76 (3.97) (2.21) Land holding (bighas) 9.21 1.15 (11.16) (0.88) Cultivated area (bighas) 6.75 1.05 (7.25) (0.73) Modern inputs used (Rs) 3,002 170 (5,0091 (287) Investment in livestock 2,145 4,276 (3,758) (3 ,Sob) Investment in tractor and pumps (Rs) 5,550 (19,293) - 0 Operator's age (yrs.) 42 42 (13) (13) operator's fanning experience 19 22 (yrs.1 (22) (13) Operator's nonfarm work 10 30 (percent) (30) (46) Total farm revenue (Rs) 28,884 10,806 (36,086) (7,698) Figures in parentheses are standard deviations and those outside paranthese? are means: 1 hectare = 1.48 bigha; U.S. $1.00 = Rs 12.00. r f - - .r - .5 * D  111. THE MODEL: To a t t a i n t h e s t i p u l a t e d o b j e c t i v e s , two s e p a r a t e b u t c l o s e l y i n t e r - I [ r e l a t e d econometric m e t ' As: t h e p r o d u c t i o n and prof i t f u n c t i o n s : are employed i n t h i s p a p e r i n a.'dition t o a tabular analysis. The f i r s t p a r t of t h i s s e c t i o n d e s c r i b e s how e n g i n e e r i n g ( s i n g l e o u t p u t ) , g r o s s s a l e s , and v a l u e added p r o d u c t i o n f u n c t i o n s can b e u t i l i z e d t o measure t h e worker and a l l o c a t i v e e f f e c t s of e d u c a t i o n . The l a t t e r p a r t d i s c u s s e s how a normalized r e s t r i c t e d p r o f i t f u n c t i o n can be employed t o t e s t t h e s i g n i - f i c a n c e of t h e worker ( t e c h n i c a l ) and a l l o c a t i v e ef f e c c s ( e f f i c i e n c i e s ) of e d u c a t i o n ( e d u c a t e d ) . (i) Production F u n c t i o n Mode?., Education c o n t r i b u t e s t o o u t p u t through t h e worker and a l l o c a t i v e effects. The a l l o c a t i v e e f f e c t h a s two components: input- allocation and i n p u t - s e l e c t i o n effects . A p r o d u c t t o n f u n c t i o n framewors' (based on Welch's work) demonstrates t h a t t h e marginal v a l u e product (MVP) of e d u c a t i o n e s t i m a t e d from a v a l u e added production f u n c t i o n c a p t u r e s a l l i the three effects - worker, i n p u t - a l l o c a t i o n and i n p u t s e l e c t i o n . The i MVP of education from a g r o s s s a l e s p r d u c t i o n f u n c t i o n measures only W of e d u c a t i o n from t h e worker and i n p u t - a l l o c a t i o n e f f e c t s w h i l e t h e M an e n g i n e e r i n g ( s i n g l e crop, p r o d u c t i o n f u n c t i c o n t a i n s only t h e worker effect. Thus t h e key t o measuring t h e t h r e e e f f e c t s of e d u c a t i o n i s t o e s t i - - - s 'Z - mate t h e v a l u e added, g r o s s s a l e s and e n g i n e e r i n g p r o d u c t i o n f u n c t i o n s -- e 5/ R e f e r t o sppendix IV f o r a d e t a i l e d d i s c u s s i o n of t h e t h e o r e t i c a l a s p e c t of t h e p r o d u c t i o n f u n c t i o n model.  t o d e r i v e t F e !ST of e d u c a t i o n from e a c h of t h e f u n c t i o n s . The d i f - f e r e n c e i n c h e MVP from v a l u e added and g r o s s s a l e s f u n c t i o n measure t h e input- selection effect. The d i f f e r e n c e i n t h e W P from g r o s s s a l e s and engineering function represents t h e input- allocation e f f e c t . The MVP - of e d u c a t i o n from t h e e n g i n e e r i n g f u n c t i o n measures t h e worker e f f e c t . A comparison of t h e e f f e c t s w i t h - i n and a c r o s s t h e r e g i o n s t h e n e n a b l e s u s t o d e t e r m i n e which of t h e t h r e e e f f e c t s i s more important i n techno- l o g i c a l l y dynamic and t r a d i t i o n a l r e g i o n s . 6/ F o r e m p f r i c a l purpose, two s e p a r a t e e n g i n e e r i n r p r o d u c t i o n func- t i o n s of t h e f o l l v f n g form a r e e s t i n s t e d f o r e a c h of t h e two r e g i o n s : where, i = t e r a i , h i l l regions 4' Also two s e p a r a t e g r o s s s a l e s p r o d u c t i o n f u n c t i o n s of t h e f o l l o w i n g form: and t .o s e p a r a t e v a l u e added p r o d u c t i o n f u n c t i o n s of t h e form: - E - 6/ R i c e and maize a r e t h e most i m p o r t a n t h i l l (Gorkha) r e g i o n s ( d i s t r i c t s ) . ;raps of t h e t e r a i (Bara) and Thus, r i c e and maize p r o d u c t i o n functions respectively represent the engineering production functions f o r t e r a i and h i l l r e g i o n s * a r e a l s o e s t i m a t e d f o r e a c h of t h e two r e g i o n s . Where ye i s r i c e o r m a i z e o u t p u t i n q u i n t a l s , Y i s g r o s s s a l e s ( v a l u e of t o t a l f a n p r o d u c t i o n p l u s o f f - f a r m income) i n rupees. V is value added ( g r o s s sales minus c o s t o f purchased i n p u t s ) i n r u p e e s . L is t h e market v a l u e of t o t a l c u l t i v a t e d l a n d i n r u p e e s . L~ i s t h e market v a l u e of l a n d ' u n d e r r i c e o r maize c u l t i v a t i o n i n r u p e c s . NF i s man-years o f available family labor. K is c a p i t a l (12 p e r c e n t of t h e t o t a l i n v e s t m e n t i n l i v e s t o c k s , f a r m equipment and machines). A i s a g e of f a r m o p e r a t o r i n years. E i s y e a r s of s c h o o l i n g of f a r m o p e r a t o r . EX i s i n t e r a c t i o n between e d u c a t i o n and e x t e n s i o n . xe is t h e number of e x t e n s i o n c o n t a c t i n r i c e o r maize. X is t o t a l extension c o n t a c t s during t h e crop year (1979- 1980). k is t r a c t o r h o u r s equivalen&-I o f machine u s e i n r i c e . M i s t r a c t o r h o u r e q u i v a l e n t of machine u s e d d u r i n g t h e crop y e a r . NH is a a n d a y s of h i r e d l a b o r employed d u r i n g t h e c r o p y e a r . Nlie t o t a l d a y s of h i r e d l a b o r emploired i n r i c e o r maize. B is t o t a l d a y s of b u l l o c k employed during t h e crop year. F~ i s k i l o g r a m s of f e r t i l i z e s ' applild i n r i c e or maize. F is t o t a l f e r 6 i l i z e r a p p l i e d during t h e krop year. BF is t o t a l L/ I n &is s t d y , i n p u t used d u r i n g t h e c r o p y e a r 1979-80 means t h e q u w - t i t 9 o f a g i v e n i n p u t employed i n r i c e , wheat and s u g a r c a n e i n Bara o r t h e q u a n t i t y of a i n p u t used i n maize, r i c e and wheat i n Gorkha - d u r g g t h e y e a r . T r a c t o r h o u r e q u i v a l e n t was c a l c u l a t e d by d i v i d i n g 8 t h e eum of expenses on t r a c t o r and pumpsets by h o u r l y t r a c t o r r e n t a l rate,- ?/ Q u a n t i t y of f e r t i l i z e r w a s computed by d i v i d i n g t h e sum of e x p e n s e s on complexal, u r e a and p o t a s s i u m s u l p h a t e f e r t i l i z e r s by p e r k i l o g r a m p r i c e of complexal.  days of f a m i l y bullock employed during t h e crop y e a r . DL is 1 i f c u l t i - vated a r e a i s a t l e a s t six bighas i n t h e t e r a i o r a t l e a s t 1.54'b&bs i n t h e h i l l an8 0 otherwise. S p e c i f i c a t i o n of education and e x t e n s i o a i n l i n e a r form p e r m i t s zezo ' a s a v a l i d observation. Many farmers in t h e a r e a s t u d i e d and some of them in my sample have no formal education o r e x t e n s i o n c o n t a c t s b u t have a aon-zero productioa. Thus, education and extension i n t h e operation& models ( 1 t o 3 ) a r e s p e c i f i e d i n l i n e a r form. The e s t i m a t e d c o e f f i c 3 e a t s ca11 be i n t e r p r e t e d a s t h e percentage change i n t h e dependent v a r i a b l e for a u n i t change in e d u c a t i o n and extension. (ii) P r o f i t Function Model The p r o f i t f u n c t i o n approach p r e s e n t s i t s e l f a s an a l t e r n a t i v e to t h e production f u n c t i o n . Moreover, i t may a l s o be more a p p r o p r i a t e fo determine t h e s i g n i f i c a n c e of t h e worker ( t e c h n i c a l ) and a l l o c a t i v e effects ( e f f i c i e n c i e s ) of education f o r t h e following reasons. Firsay, t h e normalized r e s t r i c t e d p r o f i t f u n c t i o n and i n p u t demand f u n c t i o n s are f u n c t i o n s of predetermined v a r i a b l e s . They a r e econometrically b e e c u r s u i t e d f o r e s t i m a t i o n because e s t i m a t i o n of such f u n c t i o n s a v o i d s p a s s i b h e simultaneous equation b i a s . Secondly, i t p e n i t s t e s t i n g of h y p o t h e s e s . * concerning a l l o c a t i v e and worker ( t e c h n i c a l ) e f f e c t s (ef f i c i e r ~ c i e s )ob - education (educated) without-having t o e s t i m a t e d i f f e r e n t t y p e s and Ermc- '3 t i o n s a s i n t h e c a s e of proddction f u n c t i o n approach (1 t o 3 1. TMsdly, - - t h e p r o f i t and input demand Cynctions e s t i m a t e d by seemingly u n r e l a t e d - m r e g r e s s i o n provide a s y m p t o t i c a l l y more e f f i c i e n t e s t i m a t e s than t h e pro- duction f u n c t i o n e s t i m a t e d by OLS. Fourthly, t h i s model t a k e s i n t o ac- count t h e 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 l l o c a t i v e e f f i c i e n c y an8  e f f e c t i v e p r i c e s and p e r m i t s t e s t i n g of h y p o t h e s e s c o n c e r n i n g r e l a t i v e economic ( a l l o c a t i v e and t e c h n i c a l ) e f f i c i e n c y d i f f e r e n c e s between t h e e d u c a t e d and i l l i t e r a t e f a n n e r s . A b r i e f discussion-9-/ o f how a p r o f i t i f u n c t i o n approach c a n b e employed t o t e s t h y p o t h e s e s p e r t a i n i n g t o t h e worker and a l l o c a t i v e e f f e c t s f o l l o w s . L e t t h e normalized r e s t r i c t e d p r o f i t f u n c t i o n (3) and i n p u t demand f u n c t i o n s (5-7) f o r h i r e d l a b o r (NH), b u l l o c k (B) and f e r t i l i z e r (F) f o r t h e two r e g i o n s b l oe/ . . The t h e o r y u n d e r l y i n g t h e g r o f i t f u n c t i o n approach i s w e l l d i s c u s s e d i n l i t e r a t u r e (Lau and Yotapoulos 1971, Yotopoulos and t a u 1973 a d 1979, P u d a s a i n i 1981). T h i s s e c t i o n p r e s e n t s o n l y 6he o p e r a t i o ~ . a l p r o f i t f u n a c t i o n moilel u t i l i z e d t o test h y p o t h e s e s c & c e r n i n g t h e wgrker and a l l o c a t i v e e f f e c t s of e d u c a t i o n . - w '2' *burning an a d d i t i v e e r r o r w i t h z e r o e x p e c t a t i o n a n e f i n i t e v a r i a n c e and t h e c o - v a r i e n c e of t h e e r r o r s of two e q u a t i o n s f o r t h e same farm t o b e non- zero w h i l e t h e c o - v a r i a n c e of t h e e r r o r s of two e q u a t i o n s c o r r e s p o n d i n g t o d i f f e r e n t f a r m s t o be z e r o , Z e l l n e r ' s a s y m p t o t i c a l l y e f f i c i e n t (seemingly u n r e l a t e d r e g r e s s i o n ) method was employed f c r t h e j o i n t eo t i m a t i o n of t h e o p e r a t i o n a l ~ o d e l s(4-7) .  where, i = t e r a i , h i l l and n * i s a r e s t r i c t e d p r o f i t n o r m a l i z e d by t h e output price. The r e s t r i c t e d p r o f i t i s t h e d i f f e r e n c e between t h e g r o s s s a l e s minus t h e c o s t o f v a r i a b l e i n p u t s of h i r e d l a b o r , f e r t i l i z e r and bullock. The v a r i a b l e s L, NF, K, A, E and X a r e a s d e f i n e d e a r l i e r i n production function. ED is 1 i f e d u c a t e d f a r m e r and z e r o o t h e r v i s e . EDo is 1 i f i l l i t e r a t e f a r m e r s and z e r o o t h e r w i s e . XD is 1 i f f a r m e r s have e x t e n s i o n c o n t a c t and z e r o o t h e r w i s e . XD is 1 i f f a n n e r s have n o 0 e x t e n s i o n c o n t a c t and z e r o o t h e r w i s e . The v a r i a b l e s Pn, Pb and Pf a r e r e s p e c t i v e l y p r i c e of l a b o r , b u l l o c k and f e r t i l i z e r n o r m a l i z e d by t h e output p r i c e . S u p e r s c r i p t s E a n d U d e n o t e e d u c a t e d and i l l i t e r a t e f a r - mers r e s p e c t i v e l y . Economic e f f i c i e n c y c o n s i s t s of two components: t e c h n i c a l and a l l o c a t i v e (price) eff5ciency. Fanners a r e a l l o c a t i v e l y e f f i c i e n t i f t h e y maximize p r o f i t ( i . e . e q u a t e m a r g i n a l v a l u e p r o d u c t s o f v a r i a b l e C inputs t o t h e i r respective opportunity costs) and t h e maximization o f f i p r o f i t is r e f e r r e d t o as a b s o l u t e a l l o c a t i v e e f f i c i e n c y h e r e a f t e r . The B I t h y p o t h e s i s t h a t b o t h e d u c a t e d and i l l i t e r a t e farmers are abso- i 1 l u t e a l l o c a t i v e e f f i c i e n t is t e s t e d by imposing r e s t r i c t i o n s (8) i n r w The h y p o t h e s i s ( 8 ) c o u l d b e r e j e c t e d i f e i t h e r one of t h e group f a i l s t o maximize p r o f i t . Thus, t h e h y p o t h e s e s t h a t t h e e d u c a t e d f a r m e r s a r e absolute a l l o c a t ive e f f i c i e n t :  Ho: * aNfaN * ; aB - a B * ; aF-a * * F and t h a t t h e i l l i t e r a t e s are a b s o l u t e a l l o c a t i v e e f f i c i e n t - a r e a l s o t e s t e d s e p a r a t e l y t o determine whether t h e educated o r t h e illi- t e r a t e s f a i l t o maximize p r o f i t s . The educated and i l l i t e r a t e farmers can be d i f f e r e n t in terms of economic e f f i c i e n c y i f t h e y do n o t have t h e same t e c h n i c a l e f f i c i e n c y and/or f a c e d i f f e r e n t p r i c e s even i f t h e y a r e a b s o l u t e a l l o c a t i v e e f f i c i e n t , They can have d i f f e r e n t economic e f f i c i e n c y i f they a r e a l l o c a t i v e i n e f f i c i e n t even i f t h e y have t h e sama t e c h n i c a l e f f i c i e n c y and f a c e t h e same p r i c e s . The p r o f i t f u n c t i o n m o d e l ' t a k e s i n t o account t h e d i f f e r e n c e s in t e c h n i c a l e f f i c i e n c y , a l l o c a t i v e e f f i c i e n c y and e f f e c t i v e p r i c e s and p e r m i t s a test of t h e r e l a t i v e economic e f f i c i e n c y d i f f e r e n c e s between t h e educated and i l l i t e r a t e f a n n e r s . Consequently, t h e hypothesis of e q u a l r e l a t i v e economic e f f i c i e n c y of educated and i l l i t e r a t e s i s t e s t e d as: Since h i g h e r economic e f f i c i e n c y of educated farmers c a n emanate from t h e i r being t e c h n i c a l l y a n d l o r a l l o c a t i v e l y nore e f f i i i e n t than t h e i l l i t e r a t e s , t h e h y p o t h e s i s of t h e e q u a l r e l a t i v e a l l o c a t i v e e f f i c i e n c y : - - .* L *E = ' * ipE *U *= *U = a a = aB ; a F - F N ' B and t h e hypu&esis a of t h e e q u a l r e l a t i v e a l l o c a t i v e and t e c h n i c a l e f f i - ciency : -.-- - --OF- ---- - - -..- - - ----- . -. - . -- - ------A ---. - - - -- . .  (13 1 HO: dE = O and a r e a l s o t e s t e d t o d e t e r m i n e whether t h e h i g h e r r e l a t i v e economic e f f i - c i e n c y of t h e e d u c a t e d comes from t h e 5 r b e i n g a l l o c a t i v e l y a n d / o r tech- n i c a l l y more e f f i c i e n t t h a n t h e i l l i t e r a t e s . S i n c e t h e i s s u e of , ? t u r n s t o ' s c a l e h a s i m p o r t a n t p o l i c y i m p l i c a t i o n s t h e h y p o t h e s i s of c o n s t a n t r e t u r n s t o s c a l e : (14 1 Ho: BL + BK + BN = 1 is a l s o t e s t e d t o d e t e r m i n e i f a c o n s t a n t r e t u r n t o s c a l e p r e v a i l s i n t e r a i and h i l l r e g i o n s of Nepal. IV. THE EMPIRICAL FINDINGS: The f i r s t p a r t of t h i s s e c t i o n r e p o r t s t h e r e l a t i o n s h i p between e d u c a t i o n and o t h e r v a r i a b l e s such as income o r modern i n p u t u s e . The second p a r t p r e s e n t s t h e r e s u l t s based on t h e e s t i m a t i o n of e n g i n e e r i n g , g r o s s s a l e s and v a l u e added p r o d u c t i o n f u n c t i o n s and draws c o n c l u s i o n s concerning t h e r e l a t i v e importance of t h e worker and a l l o c a t i v e e f f e c t s . I a The t h z r d p a r t d e s c r i b e s t h e f i n d i n g s from t h e p r o f i t f u n c t i o n model p e r t a i n i n g t o t h e economic e f f i c i e n c y d i f f e r e n c e s between t h e e d u c a t e d - - and i l l i t e r a t e f a r m e r s . The f o u r t h p a r t . F i s c u s s e s th? c o n t r i b u t i o n of e d u c a t i o n t o a g r i c u l t u r a l p r o d u c t i v i t y id modernizing and t r a d i t i o n a l environments . *m (i) R e l a t i o n s h i p Between Education and O t h e r V a r i a b l e s . - Education is n o t 1 f r e e good. C o s t s i n terms >f p h y s i c a l r e s o u r c e s i and time a r e i n c u r r e d i n t h e p r o c e s s of a c h i e v i n g e d u c a t i o n , and t h e c o s t s  . involved i n t h e p u r s u i t of l e a r n i n g i n c r e a s e w i t h t h e l e v e l of oducation. Thus, any r a t i o n a l demand f o r i n c r e a s e d education must be a s s o c i a t e d w i t h h i g h e r expected e a r n i n g s . The more educated farmers can a t t a i n h i g h e r income by adopting modern i n p u t s and p r a c t i c e s t o g e t h e r w i t h o p t i o n a l l y allocating t h e new and e x i s t i n g r e s o u r c e s among competing uses. Edu- c a t i o n can b e expected t o improve farmers 1 d e c i s i o n making a b i l i t y con- c e r n i n g i n p u t s e l e c t i o n and a l l o c a t i o n s i n c e i t may enhance t h e i r a b i l i t y t o o b t a i n , a n a l y z e , and u s e economically u s e f u l information about i n p u t s , p r a c t i c e s and market c o n d i t i o n s . I n t h i s s e c t i o n r e s u l t s from a t a b u l a r a n a l y s i s is presented t o examine i f d i f f e r e n t l e v e l s - primary, secondary, h i g h school and c o l l e g e - of education and o t h e r v a r i a b l e s - such a s farm revenue, modern i n p u t s v s e , c h i l d m o r t a l i t y , e x t e n s i o n c o n t a c t s - are i n t e r r e l a t e d i n t h e terai and h i l l r e g i o n s . The income of t h e f a r m e r s , viewed i n teras of t o t a l farm revenue, i n c r e a s e d w i t h t h e l e v e l of farm o p e r a t o r s ' e d u c a t i o n i n both t h e t e r a i . and h i l l r e g i o n s (Tables 4 and 5 ) . The income of t h e educated farmers, viewed even i n terms of revenue p e r bigha, i s h i g h e r than t h a t of illi- t e r a t e s i n both regions. Moreover, t h e revenue p e r bigha a l s o c o n s i s t e n t l y r o s e with t h e i n c r e a s e i n t h e l e v e l of farm o p e r a t o r s ' e d u c a t i o n i n both * a r e a s (except f o r t h e drop i n t h e secondary l e v e l r e l a t i v e t o t h e primary l e v e l i n the t e r a i ) . The t o t a l farm revenue (revenue p e r farm) is m ~ c h '? h i g h e r f o r a given l e v e l of e d u c a t i o n i n t e r a i u / - than i n h i l l while' - * * - ? This i s larg;ly because farms a r e much l a r g e r i n t h e t e r a i t h a n -i n . t h e h i l l r e g i o n . However, i t may a l s o be p a r t l y because education c o n t r i b u t e s more t o t h e farm revenue i n t h e dynamic t e r a i than i n t r a d i t i o n a l h i l l areas.  T a b l e 4. R e l a t i o n s h i p between e d u c a t i o n and o t h e r v a r i a b l e s i n T e r a i Region, Nepal, 1979-1980. Childhood operator*^ Total Revenue Father's economic Exten~ion Cultivated Modern Child educational revenue p e r blgha education condition contact area inputs death level (Rs)* (Rs1 (yrs. (**I (no. (bigha) ( ~ d b l s h d (no.) Illiterate 10,875 N = 37 (6,715) - Secondary N 57 26,005 (20,208) High ~ c h o o l 37,040 N = 45 (44,999) r u ' - Collcge N 11 78,768 (70,346) Entire N - populntlon 205 28,884 (36,386) 4,336 (1,911) 1.89 (2.21) 1.83 (0.62) 3.94 (3.97) 6.75 (7.26) 410 (332) 1.39 (1.74) . . * Note: The numbers i n p a r e n t h e s e s a r e s t a n d a r d d e v i a t i o n s and t h o s e w i t h o u t p a r e n t h e s e s a r e means. b u n i t s of meansurcment: RR 12.00 = US $1.00 1 bigha **Clllldl~ood economic condition was meaeurecl a s 1 poor, 2 fair, 3 - 0.68 h e c t a r e s -- excellent. - i I Q hk 18 Table S. Relationship between education and o t h e r v a r i a b l e s i n H i l l y Reg i o n , Nepal, 1979-1980. Childhood Operator's Total Revenue rather's economic Extension Cultivated !sderr. Aild educational revenue per tiiglla educet ion condition contact :I rea i : ucath level (Us) * (Rg) (Y~s* (**I (no* (bigha) (mibighi3 (no. ) Illiterate 6,920 9,861 0.61 1.42 0.24 0.80 69 1.73 N = 33 (6,045) (9,203) (1.66) (0.56) (0.66) (0.52) (88) (1.99) i Primary 11,876 11,000 1.48 1.64 0.66 1.19 139 1.30 N = 61 (7,936) (4,978) (1.57) (0.52) (1.28) (0.84) (229) (1.36) I 11 Secondary 11,842 11,663 1.71 1.54 0.58 1.03 199 0.58 N 24 (3,951) (5,708) (2.01) (0.51) (1.56) (0.54) (223) (0.83) High school 13,735 13,103 2.31 1.81 1.69 1.07 264 4 0 . N = 26 (10,529) (.- . B 3 ) (2.46) (0.40) (4.57) (0.84) (324) (0.76) Co1 I c p ! 13,506 13,665 1.80 1. RO 1.60 0.99 123 0.20 N15 (2,106) (3,776) (1.64) (0.45) (0.55) (0.37) (144) (0.45) I . . Ent t r c pol'ulilt ion 11,807 11,276 1.48 1.61 0.77 1.05 155 1.09 N 149 (7,698) (6,264) (I.. 88) (0.52) (2.22) (0774) (231) (1.44) Note: The numt)c?rs In parcntl~escsa r e utandard dcvia:ions and tllose without parenthese are means. *Units of mcasurcmcnt: R s 12.00 US $1.00 - 1 bigha = 0.68 llectclres **ClrLldl~oodeconornlc condition was mcnsured a s 1 poor, 2 = Pair, 3 = e x c e l l e n t . gu f  revenue per bigha i s h i g h e r i n h i l l 3 than i n t e r a i region. The r e s u l t supports t h e c o ~ l t e n t i o nt h a t a p o s i t i v e c o r r e l a t i o n e x i s t s between t h e l e v e l of e a r n i n g s and t h e l e v e l s of education. However, t h e educated and i l l i t e r a t e farmers o r t h e farmers with d i f f e r e n t l e v e l s of education d i f f e r w i t h each o t h e r i n c h a r a c t e r i s t i c s o t h e r than education such as c u l t i v a t e d a r e a , childhood economic c o n d i t i o n o r f a t h e r ' s education. i i 1 - Thus, one must be c a r e f u l not t o a t t r i b u t e the t o t a l earning differntiaf. I t between educated and i l l i t e r a t e s o r between farmers w i t h d i f f e r e n t l e v e l s t of education t o education alone. L IF The u s e of modern i n p u t s ( f e r t i l i z e r , p e s t i c i d e s and KYV seed) S 8i and extension s e r v i c e s i n c r e a s e d c o n s i s t e n t i y w i t h t h e l e v e l of farm f o p e r a t o r ' s education i n t e r a i region. Even though t h e p a t t e r n of in- I c r e a s e i n t h e use of extension and mddern input was not a s c o n s i s t e n t i n t h e h i l l a s i t i s i n t e r a i , a l l l e v e l s of educated farmers a r e employing more modern i n p u t s and a l s o has higher extension c o n t a c t than illiterate t farmers. For each l e v e l of o p e r a t o r ' s %ducation t h e number of extensfon c o n t a c t s and t h e l e v e l of t h e u s e of modern i n p u t s a r e much h i g h e r i n t e r a i than i n h i l l region. The f i n d i n g s i n d i c a t e t h r e e t h i c g s . First, e i t lends support t o t h e hypothesis t h a t education makes farmers inpovative (Chaudharix Second, i t enhances farmers' innovative a b i l i t y mlrch more i i n a t e c h n o l o g i c a l l y dyna6ic a g r i c u l t u r e than i n a t r a d i t i o n a l area. ! . T h i r d l y , t h e educated - farmers i n t e r a c t b e t t e r v i t h t h e extension and r -/ 12 i Farmers i n t h e h i l l y region (Gorkha) have extremely small c u l t i v a t e d holdings. A s a r e s u l t , they do very i n t e n s i v e farming and have, i n g e n e r a l , higher income p e r u n i t of land, However, almost a two- and-one-half f o l d h f g h e r revenue p e r bigha i n t h e c a s e of Gorkha a s compared t o Bara is expected t o be a r e s u l t of downward b i a s in t h e r e p o r t e d land a r e a i n Corkha s i n c e a land survey underway i n t h e a r e a is n o t y e t complete and farmers did not know t h e e x a c t s i z e of t h e i r Farms. o t t ir agencies. Not s u r p r i s i n g l y , an i n v e r s e r e l a t i o n s h i p i s found t o e x i s t between t h e l e v e l of o p e r a t o r ' s education and c h i l d m o r t a l i t y i n both t h e regions. On t h e o t h e r hand, t h e socii-economic o r background v a r i a b l e s such a s f a t h e r ' s education and childhood 'economic c o n d i t i o n s a r e p o s i t i v e l y and d i r e c t l y r e l a t e d with t h e completed l e v e l s of o p e r a t o r ' s education i n both a r e a s . Childhood e-onomic c o n d i t i o n of farm o p e r a t o r s i n t e r a i is r e l a t i v e l y j e t t e r than t h e farm o p e r a t o r s of h i l l region. Similarily, farm o p e r a t o r s ' f a t h e r ' s education l e v e l i s a l s o s l i g h t l y h i g h e r i n :he c a s e of t e r a i r e l a t i v e t o t h o s e o p e r a t o r s i n h i l l region. (ii) Production Function E s t i m a t e s , A l l o c a t i v e and Corker E f f e c t s of Education. The e s t i m a t e s from e n g i n e e r i n g , g r o s s s a l e s and value added pro- duction f u n c t i o n s f o r t h e t e r s i and h i l l r e g i o n s a r e contained i n t a b l e s 6 and 7 r e s p e c t i v e l y . The production f u n c t i o n r e s u l t s a r e reasonable i n terms of s i g n s and s t a t i s t i c a l s i g n i f i c a n c e of most of t h e e s t i m a t e s . A l l t h e f u n c t i o n s suggest t h a t education has a p o s i t i v e c o n t r i b u t i o n t o a g r i c u l t u r a l output. However, e x t e n s i o n has i n s i g n i f i c a n t c o e f f i c i e n t r e g a r d l e s s of i t s s i g n i n both r e g i o n s and appears t o suggest one o r b o t h . I of t h e f o l l o w i ~ i g . ~ i r s l t,h e o b j e c t i v e df t h e extension program i s t o f a - c i l i t a t e farmers t o overcome t e c h n i c a l and economic c o n s t r a i n t s f a c i n g them - - by providing t e c h n i c a l -information about modern i n p u t s (tgchniques) and - by helping them t o g e t acces t o c r e d i t and o t h e r resourcc!s i n due time. I t Due to' inadequate t r a i n i n g and experience of extension a g t n t s , under s t a f f i n g and l a c k of due c o o r d i n a t i o n betveen extension r e s e a r c h , e x t e n s i o n  Table 6 Estimates from engineering, g r o s s s a l e s and value added production functions, t e r a i region, Nepal Independent Engineering Gross Value Variables (rice) Szles Added Land: L 0.382*** 0.303**k 0.415*** (0.051) (0.054) (0.066) P Labor: NP 0.228*** 0.252*** (0.054) (0.058) H Labor: NH 0.172** 0.120*** (0.034) (0.038) Capital: K Bullock: B P Bullock: BF Fertilizer: P Education: E Extension: X Age: A Size: DL i Constant -2.339 R~ 0.85b6 The f i g u r e s i n parentheses are standard e r. r o r s of the estimates. * S i m i f i c a n t a t 10- percent l e v e l **Significant a t 5- percent l e v e l ***Significant a t 1- percent l e v e l Table I. Estimates from engineering, g r o s s s a l e s , and value added production func'ions, h i l l y region, Nepal Indeperdent Engineering Cross Value Variables (maize) Sales Added Land: L 0.250*** 0.169*** 0.220*** (0.072) (0.060) (0.060) F Labor: NP 0.160 0.274*** 0.298** (0.099) (0.065) (0.071) H Labor: NH 0.018 0.014 - (0.033) (0.018) Capital: K 0.195*** 0.183*** ' 0.209** (0.062) (0.041) (0.044) F Bullock: BF - g F e r t i l i z e r: F 0.048 (0.047) Education: E 0.022 (0.017) Extension: X 0.212 (0.215) Age: A -0.150 (0.187) Size: DL - tant Col~e -2.227 - ? The f i g u r e s i n parentheses are standard e r r o r s o t h e csti,mates. * S i g n i f i c a n t a t 10- percent l e v e l **Significar.~ a t 5-oercent l c v e l **Significant a t 1- percent l c v e l  r e s e a r c h , e x t e n s i o n and c r e d i t and o t h e r a g e n c i e s , t h e e x t e n s i o n program! i n Nepal h a s n o t been v e r y e f f e c t i v e , and t h e n o n s i g n i f i c a n t c o e f f i c i e n t i may be ~ e f l e c t i n gt h e i n e f f e c t i v e n e s s of t h e program. Second, t h e con- v e n t i o n a l way of d e f i n i n g e x t e n s i o n v a r i a b l e a s a number of c o n t a c t s may be inadequate. A n e g a t i v e c o e f f i c i e n t of e d u c a t i o n - extension interact%- term (EX) weakly s u p p o r t s t h e c o n t e n t i o n t h a t e d ~ c a t i o na n ' . z x t e n s i o n a r e s u b s t i t u t e s i n farm d e c i s i o n making p r o c e s s i n t h e t e r a i w h i l e t h e c o e f f i c i e n t does no lend much s u p p o r t f o r o r a g a i n s t t h e h y p o t h e s i s i n the h i l l region. F e r t i l i z e r has s i g n i f i c a n t l y p o s i t i v e c o n t r i b u t i o n t o o u t p u t i n t h e t e r a i w h i l e i t d o e s n o t have a s i g n i f i c a n t i n p a c t i n t h e h i l l a r e a . There has been a s v b s t a n t i a l l y g r e a t e r i n t r o d u c t i o n of o t h e r i n n o v a t i o n s (HYV's, t r a c t o r s , i r r i g a t i o n o r pumpsets) i n a d d i t i o n t o f e r t i l i z e r i n the t e r a i r e l a t i v e t o the h i l l s . Also, e x t e n s i o n c o n t a c t and e d u c a t i o n l e v e l of f a r m e r s have s e e n h i g h e r i n t h e t e r a i . Given t h e a v a i l a b i l i t y of t h e whole package of t h e technology and h i g h e r s k i l l ( e d u c a t i o n and e x t e n s i o n ) , t h e f a r m e r s i n terai appear t o have made p r o p e r s e l e c t i o n and more e f f e c t i v e u s e of modern i n p u t s i n c l u d i n g f e r t i l i z e r . Age, a proxy f o r e x p e r i e n c e , a l s o h a s a weak p o s i t i v e i n f l u e n c e i n farm p r o d u c t i a n i n both r e g i o n s . Larger farms (DL) a r e s i g n i f i i a n t l y more e f f i c i e n t C ( t e c h n i c a l l y ) than t h e s m a l l farms i n t e r a i v h i l e t h e y a r e n o t s i g n i f i e a r r o k y d i f f e r e n t from t h e small ones in t h e h i l l r e g i o n . - - The p a t t e r n of t h e r e s u l t remafns unchanged even when t h e e n g i z e c r - age - , i n g , g r o s s s a l e s -and v a l u e added production f u n c t i o n s f o r t e r a i 8) w m and h i l l (Table 9 r e g i o n s a r e e s t i m a t e d by i n t r o d u c i n g f o u r l e v e l s o f education - p r i m a r y (PE), secondary (SE), h i g h s c h o o l (HE) and c o l l e g e CCE] - and t h r e e l e v e l s of extension - XTl (one t o s i x c o n t a c t s ) , XT2 ( s i x ta  Tablea. Estimates from engineering, g r o s s s a l e s and value added p r o d u c t f o ~ ~ f u n c t i o n s with d i f f e r e n t l e v e l s of education, t e r a i region, Hepal Independent Engineering Gross Value - Variables (rice) Sales Added - Land: L 0.386*** 0.299*** 0.413*** (0.051) (0.054) (0.066) F Labor: NF 0.266*** 0.261*** 0.363* EI Labor: NfI . (0.054) 0.172*** (0.034) (0.058) 0.121*** (0.038) - (0.083) - Capital: K 0.053*** 0.062*** 0.066*- (0.016) . . (0.018) (0.025) Bullock: B 0.048 -0.057 (0.043) - - (P 424) F Bullock: BF - o - - -0.014 (0.057) Fertilizer: P L. Usa'- 0.153*** - (0.021) (0.034) - I Pedu: PE -0.008 0.074*** ' 0.102** i g (0.025) (0.027) (0.039) ,i Sedu: SE 0.005 0.030** 0.051- f (0.014) (0.015) (0.021) I Hedu: "XE 0.003 0.02 6*** 0.036** (0.010) (0.010) (0.014) Cedu: CE 0.020* 0.044*** 0.063*+ (7.011) (0.012) (0.016) Extension: X 0.003 - Ext 1: XT1 (0.015) - - -0.001 - o 0.001 - (0.015) (0.022) Ext 2: XT2 - - -0.010 (0.010) -0.012 (0.014) Ext 3: XT 3 - - -0.015** (0.008) -0.029** (0.011) Age: A 0.026 0.128 0.157 Machine: M (0.089) 0.010 (0.097) -0.010 - (0 139) (0.018) (0.014) - Size: DL 0.233 0.267*** 0.345*** . (0.080) (0.088) 6 (0.121) Constant -2.354 3.665 3.057 Ft2 0.8589 0.8467 , 0.6919 F 92.0 64.9 33.0 w - a The f i g u r e s i n parentheses a r e standard e r r & oE the estimates. 1 *Significant a t 10-percent l e v e l **Significant a t 5-percent l e v e l I ***SigniSicant a t 1-percent l e v e l P w Table 9 Estimate8 from engineering, g r o s s s a l e s and value added prodr:ction f u n c t i o n s w i t h d i f f e r e n t l e v e l s of education, h i l l y region, Nepal IndepenCent Engineering Gross Value Variable (maize) Sales Added Land: L F Labor: NF H Labor: NEI Capital: K Bullock: B P Bullock: BF Fertilizer: F Pedu: PE Sedu: SE Hedu: HE Cedu: CE '*'- Extension: X Ext 1: XT1 Ext 2: xT2. Ext 3: XT3 Age: A Size: DL Constant ) . - he f i g u r e s In p a r e n t h e s e s a r e s t a n d a r d e r r o r s of t h e e s t i d t e s . S i g n i f i c a n t a t 10- percent l e v e l * * S i g n l i c a n t a t 5- percent l e v e l . E ***Significant a t 1- percent l e v e l nine contacts) and XT3 (more tha~cn i n e c o n t a c t s ) . A l l l e v e l s of education g e n e r a l l y have p o s i t i v e and s i g n i f i c a n t c o n t r i b u t i o n t o farm output i n both r e g i o n s . Regardless of t h e l e v e l s of c o n t a c t s , extension has no s i g n i f i c a n t impact i n h i l l r e g i o n , but more than n i n e e x t e n s i o n c o n t a c t s have n e g a t i v e i n f l u e n c e on t h e output i n t e r a i . It may be because t h a t i n t h e absence of a coordinated and e f f e c t i v e extension rogram t h e i n c r e a s e d e x t e n s i o n . c o n t a c t may simply confuse t h e farmers o r t a k e away t h e i r time t h a t they may otherwise u t i l i z e i n productive a c t i v i t y . The worker and a l l o c a t i v e e f f e c t s of farm o p e r a t o r s education a r e r e p o r t e d i n t a b l e 10, Based on t h e t a b l e t h r e e d i s t i n c t o b s e r v a t i o n s can be made. F i r s t , both t h e worker and a l l o c a t i v e e f f e c t s of education sig, n i f i c a n t l y c o n t r i b u t e t o a g r i c u l t u r a l otitput i n both t h e modernizing t e r a i and r e l a t i v e l y t r a d i t i o n a l h i l l region. Second, t h e i n p u t - a l l o c a t i o n e f f e c t of education i s t h e most important c o n t r i b u t o r t o t b e output i n b o t h regions. Since t h e a l l o c a t i v e e f f e c t compr4ses both t h e input- al- l o c a t i o n and i n p u t - s e l e c t i o n e f f e c t s , i t i s obvious t h a t e d u c a t i o n c o n t r i - butes much more t o t h e output through a l l o c a t i v e e f f e c t than through i t s worker e f f e c t G I i n both regfons. Of t h e components of a l l o c a t i v e e f f e c t , both t h e i n p u t - a l l o c a t i o n and i n p u t - s e l e c t i o n e f f e c t s s u b s t a n t i a l l y c o n t r i b u t e i n t h e dynamic t e r a i while t h e l a t t e r e f e c t i s almost non- . t s i g n i f i c a n t r e l a t i v e t o t h e former i n t h e h i l l r e g i o14/ r . Third, a l l ' - - This f i n d i n g is c o n s i b t e n t with Huffman's and ~ c h u l t r ' s ,1975 s t u d i e s . - 14' Cfven t h e prevalence =f t e r r a c e farming, s o i l erosion and o t h e r pro- blems, the h i l l a g r i @ t u r e is q u i t e complex. However, t h e i n t r o - duction of package of technology has been very l i m i t e d i n t h e region because of t h e u n a v a i l a b i l i ~ yof technology s u i t e d f o r h i g h a l t i t u d e a r e a s , high t r a n s p o r t a t i o n c o s t , low savings and u n a v a i l a b i l i t y of c r e d i t , l a c k of knowledge e t c . Thus, t h e predominance of input- al- l o c a t i o n and lack of an important i n p u t - s e l e c t i o n e f f e c t is c o n s i s t e n t w i t h t h e observation.  Table 10. The worker and allocative effects 02 farm operator's education, terai and hill regions, Nepal (in rupees). Terai Elill Effect (Bara) (Gorkha) Total (I + 11) 1,002 563 (I) Worker- (a) input-Allocation (b) Input-Selection Standard errors in parentheses. * Significant at 1 percent level. Tablell. The worker and allocative effects .kfdifferent levels of farm operator's education, terai and hill regions, Sepal (in rupees). Education Secondary_- High S c h g g \ Level Primary College Effect Terai Hill Terai Hill Terai H i l l Terai H i l l . Total (I -i- 11) 2,164 856 1,083 627 763 541 1,283 620 (I) Worker -112* 4* 700 21* 43* 29* 279* 7* I i (10) (0) (6) (2) (41 (2) (25) (1) i i (11) Allocative ,2,276 852 1,013 606 720 512 1,004 .614 ;- (a + b) (a) Input-Allocation 2,220* 9 3 P 797* 7.11" 709* 522* 992* 623s I i 8- (194) (55) (70) (43) - (62) J31) (88) (36) (b) Input-Selection 56 - 8' 5: 216*-12 5* 11 '210 12 -9 b k - (45) (9) ( 2 8 ) (8) -(!&I(26) (15) , (5) Standard errors of the estimates in parenthcs~s. * Significant at 1 percent l e v e l .  e f f e c t s of education a r e h i g h e r i n t e r a i r k l a t i v e t o h i l l r e g i o n . fm o t h e r words, e d u c a t i o n ' s c o n t r i b u t i o n t o a g r i c u l t u r a l output i s much higher i n a modernizing environment than i n a t r a d i t i o n a l one. Even though both e f f e c t s a r e s t a t i s t i c a l l y s i g n i f i c a n t , education c o n t r i b m z e s a much more t o output by improving f a n n e r s a l l o c a t i v e a b i l i t y ( a l l o c a t L u f e f f e c t ) r a t h e r than by enhancing t h e i r d i r e c t o u t p u t (worker e f f e c t ) h both environments. It is important t o n o t e t h a t education enhances Ear- mers' a l l o c a t i v e a b i l i t y ( e f f i c i e n c y ) i n a changing a g r i c u l t u r e ( t e r a by improving t h e i r a b i l i t y t o i n t r o d u c e r i g h t i n p u t s ( i n c l u d i n g tech-- g i c a l l y b e t t e r ones) and a l s o by enhancing t h i e r c a p a c i t y t o e f f i c i e n a y a l l o c a t e t h e new and e x i s t i n g i n p u t s among c o s p e t i n g uses. However, k j improves f a r m e r s ' a l l o c a t i v e a b i l i t y i n a t r a d i t i o n a l a g r i c u l t u r e ( h f m by mainly improving t h e i r c a p a c i t y t o e f f i c i e n t l y a l l o c a t e given res-es among competing uses. I'he f i n d i a g s t h a t both e f f e c t s s i g z i f i c u l t l y c o n t r i b u t e t o t h e me- p u t , t h e a l l o c a t i v e e f f e c t of education s u r p a s s e s t h e worker e f f e c t ad each of t h e t h r e e e f f e c t s a r e h i g h e r i n t h e t e r a i remains unchanged even f o r each of t h e f o u r l e v e l s of education - primary, secondary, I high s c h o o l and c o l l e g e - (tablell). The i n p u t - s e l e c t i o n e E f e c t of e b l e v e l of education i s p o s i t i v e i n the t e r a i , while t h e same i s n o t tm L i n t h e h i l l region. I t i s g e n e r a l l y regarded i n Nepal t h a t t h e r e a r e few modern i n p u t s s u i t e d f o r t h e h i l l region. The absence of i n p u t - s a - t i o n e f f e c t i n t h e region is c o n s i s t e n t with t h e observation. - (iii) A l l o c a t i v e and Techn%al - E f f i c i e n c i e s of Education from P r o f i t I Function. efficiency differences The t e s t s of h y p e r h e w ~ a r r t h g . e c o n o n i c between t h e educated and i l l i t e r a t e farmers o f t h e t e r a i and h i l l regfanas Table 12; Testing o'f hypotheses of equal econoaic efficiency of educated and illiterate fanners for total f a n , Bara'and Gorkha Districts Nepal Hypot hese Computed F-Ratios Bara dorkha - price efficiency of both F(6,804) = 7-72) F(6.580) 5.230 educated and illiterate Absolute price efficiency of educated Absolute price efficiency of illiterate Equal relative economic efficiency Equal relative price efficiency Equal relative price and technical efficiency Constant returns to scale Note: Critical F-ratios are as follows:  a r e r e p o r t e d i n t a b l e 12. The hypotheses of a b s o l u t e p r i c e e f f i c i e n c y of educated and/or i l l i t e r a t e s (hypotheses 1-31 a r e r e j e c t e d i n both regions. The t e s t i n d i c a t e s t h a t n e i t h e r t h e educated nor t h e i l l i t e r a t e s a r e a b l e t o m a x h i z e p r o f i t i n t h e s e n s e of e q u a t i n g marginal v a l u e pro- duct of v a r i a b l e i n p u t s ( h i r e d l a b o r , b u l l o c k and f e r t i l i z e r ) t c -:ir r e s p e c t i v e o p p o r t u n i t y c o s t s in t h e y e a r under study. It may b e Jecause both groups of f a n n e r s a r e i n t r o d u c i n g modern i n p u t s i n v a r y i n g degrees and over d i f f e r e n t period of time i n a d d i t i o n t o f a c i n g weather o r mar- k e t f l u c t u a t i o n s of v a r y i n g degrees. Thus they may be i n t h e p r o c e s s of a d j u s t i n g t o d i s e q u i l i b r i a , and t h e c r o s s s e c t i o n a l d a t a u t i l i z e d i n 1 t h i s s t u d y may n o t have been a b l e t o t a k e i n t o account t h e dynamic ad- justment p r o c e s s . f The t e s t of e q u a l r e l a t i v e economic e f f i c i e n c y hypothesis is rej e c t e d i n f a v o r of h i g h e r economic e f f i c i e n c y of t h e educated i n b o t h regions. I The hypothesis of e q u a l r e l a t i v e a l l o c a t i v e and t e c h n i c a l e f f f c i e n c y is I a l s o r e j e c t e d i n f a v o r of h i g h e r a l l o c a t i v e and t e c h n i c a l e f f i c i e n c y of t h e educated i n both r e g i o n s . However, t h e h y p o t h e s i s of e q u a l r e l a t i v e a l l o c a t i v e e f f i c i e n c y i s r e j e c t e d i n t h e h i l l r e g i o n while i t i s not rejected i n the terai. The t e s t s of t h e r e l a t i v e e f f i c i e n c y hypotheses demonstrate t h a t t h e educa,ted farmers a r e more e c o n o ~ i cefficient relative . t o t h e i l l i t e r a t e s i n both r e g i o n s . The t e s t f u r t h e r d i s p l a y t h a t t h e h i g h e r r e l a s i v e economic e f f i c i e n c y of t h e educated i n t h e h i l l r e g i o n '4 i s . a result'of - t h e i r being both more t e c h n i c a l and a l l o c a t i v e e f f i c i e n t - - thar, t h e i 4 t e r a t e s . But t h e h i g h e r economic e f f i c i e n c y of t h e educated i n t h e t e r a i emanates mainly from t h e i r being t e c h n i c a l l y more e f f i c i e n t E I rkan t h e i l l i z e r a t e s . I n o t h e r words, i t means t h a t education has a si'g-  n i f i c a n t worker e f f e c t b u t a weak a l l o c a t i v e e f f e c t i n t h e t e r a i w h i l e both e f f e c t s a r e s i g n i f i c a n t i n t h e h i l l . This p r o f i t f u n c t i o n based f i n d i n g is s l i g h t l y d i f f e r e n t t h a n t h e p r o d u c t i o n f u n c t i o n r e s u l t s i n t h a t t h e l a t t e r i n d i c a t e d t h a t e d u c a t i o n has a s i g n i f i c a n t a l l o c a t i v e e f f e c t even i n t h e t e r a i region. Given t h e w i d e l y h e l d view t h a t e d u c a t i o n e n a b l e s farmers t o more q u i c k l y a d j u s t t o d i s e q u i l i b r i a , t h e educated i n t h e modernizicg t e r a i b - were a l s o expected t o p o s s e s s h i g h e r a l l o c a t i v e e f f i c i e n c y r e l a t i v e t o the illiterates. Consequently, t h e non- rejection of e q u a l r e l a t i v e a l - l o c a t i v e e f f i c i e n c y h y p o t h e s i s i n t h e r e g i o n appears r a t h e r s u r p r i s i n g . I However, g i v a n t h e f a c t t h a t both e d u c a t i o n and farm technology have b e e n g r a d u a l l y i n t r o d u c e d i n t h e t e r a i over t h e g e a r s , i t is p o s s i b l e t h a t t h e r e has been a s i g n i f i c a n t 'lspillover'l e f f e c t of education on t h e illi- t e r a t e s e n a b l i n g t h e l a t t e r t o be a s a l l o c a t i v e e f f i c i e n t a s t h e educated. The c r o s s - s e c t i o n a l d a t a employed i n t h i s study may n o t have been a d e q u a t e t o t a k e i n t o account t h e s p i l l o v e r e f f e c t s and t h e n o n - r e j e c t i o n of the h y p o t h e s i s may not n e c e s s a r i l y imply a l a c k of s i g p i f i c a n t a l l o c a t i v e e f f e c t of e d u c a t i o n i n t e r a i region. The r e j e c t i o n of t h e e q u a l r e l a t i v e a l l o c a t i v e e f f i c i e n c y h y p o t h e s i s I n t h e h i l l , where t h e s p i l l - o v e r e f f e c t s ~f~educatio n been i n s i g n i f i c a n t s i n c e t h e i n t r o $ u c t i o n of new i n p u t s has and spread of education a r e r e l a t i v e l y l i m i t e d and new phenomena, r e i n - f o r c e s t h e p l a u s i b i l i t y of t h e s p i l l ~ o v e re f f e c t e x p l a n a t i o n i n t h e terai. + ' (iv) Agricultural .Productivity i n ~ g d e r n i z i n - ~ T r a d i t i o n a l Environments and * To test t h e h y p o t h e s i s t h a t e d q a t i o n has a h i g h e r payoff i n dynamic I t e r a i than i n a r e l a t i v e l y t r a d i t i o n a l h i 1 1 region and a l s o t o d e t e r m f n e whether p r o d u c t i o n and p r o f i t f u n c t i o n s g i v e s i m i l a r r e s u l t s i n s u p p o r t of o r a g a i n s t t h e hypothesis, t h e c o n t r i b u t i o n of education t o a g r i c u l - t u r a l p r o d u c t i v i t y o r o u t p u t is computed from production and p r o f i t func-- t i o n e s t i m a t e s f o r both t e r a i and h i l l r e g i o n s . The p r o d u c t i o n f u n c t i o n based e s t i m a t e s demonstrate t h a t an i n c r e a s e i n t h e average education of a farm o p e r a t o r by one year expands o u t p u t by 5.2 p e r c e n t (RS1103) i n t h e t e r a i and 5.9 p e r c e n t (RS583) i n t h e h i l l region ( T a b l e l P . S i m i l a r l y , an a d d i t i o n a l y e a r of d i f f e r e n t l e v e l s of education i n c r e a s e s a g r i c u l t u r a l output from 3.7 percent (RS 785) to 10.7 p e r c e n t (RS 2270) i n t h e t e r a i and 5.8 p e r c e n t (RS 573) t o 10.5 percent (RS i037) i n t h e h i l l ( t a b l e 1 3 . Even though t h e p e r c e n t a g e i n c r e a s e i n o u t p u t f o r t h e average and d i f f e r e n t l e v e l s of education is s i m i l a r i n t h e t e r a i and h i l l , t h e t o t a l i n c r e a s e i n output r e s u l t i n g from an a d d i t i o n a l year of education i s much h i g h e r i n t e c h n o l o g i c a l l y Cynamic t e r a i t h a n t r a d i t i o n a l h i l l region. I n t e r e s t i n g l y , t h e r a t e of i n c r e a s e i n ouptput g e n e r a l l y d e c l i n e s w i t h t h e r i s e i n t h e l e v e l of e d e c a t i o n i n both r e g i o n s i n d i c a t i n g t h a t t h e law of diminishing marginal p r o d u c t i - ~ i t ya p p l i e s even i n t h e u s e of e d u c a t i o n a l inplh(Tab1e 19. The i n c r e a s e i n t h e c o n t r i b u t i o n t o t h e o u t p u t s t e a d i l y d e c l i n e s up t o h i g h * school l e v e l . The c o n t r i b u t i o n of c o l i e g e l e v e l education remains almost c o n s t a n t ( r e l a t i v e t o s e c o n d a r j and high s c h o o l level) i n t h e h i l l while i t substantially r i s e s i n the terai. T h i s may be because t h a t higher education may e n a b l e farmers t o i n t r o d u c e nore modern i n p u t s an& a l s o '* - enhance t h e i r a b i l i t y t o a d j u s t t o d i s e q u i l i b r i a i n a changing gnviron- - * . ment ( t e r a i ) r h i l e a h i g h e r education may have a l i m i t e d v a l u e relatively traditional area (hill). - a The p r o f i t f u n e t i u n based e s t i m a t e s d i s p l a y t h a t an a d d i t i o n a l y e a r Table 13 C o n t r i b u t i o n of education t o output based on production and p r o f i t f u n c t i o n e s t i m a t e s , t e r a i and h i l l r e g i o n s , Sepal. Terai Hi11 Education Percent T o t a l Ootput Pcrccnt T o t a l Output Level (as) Production F u n c t i o n Primary Secondary High School College 6.5 1,379 6.8 . 671 Average P r o f i t Function Average .. Note: The c o n t r i b u t i o n of education is compated by u s i n g the f o l l o u i n g formula ( Lockheed, e t . al. 1980). percent = [(E E - 1) x 1001 / N; t o t a l o u t p u t [(percent x ?) x 1 -1, 100 where 6 E 1s e d u c a t i o n c o e f f i c i e n t i n v a l u e added f u n c t i o n i n tebSes 6 and 7 { f o r a v e r a g e education i n production f u n c t i o n ) ; teblcs 8 and 9 ( f o r d i f f e r e n t l e v e l s of e d u c a t i o n i n production f u n c t i o n ) o r 4n t a b l e 1.4 ( f o r average e d u c a t i o n i n p r o f i t f u n c t i o n ) , N = y c a r s of farm o p e r a t o r ' s s c h o o l i n g a t mean, = r e s t r i c t e d p r o f i t o r v a l u e added. a t mean. Table 14 Estimates from j o i n t estimation of normalized r e s t r i c t e d p r o f i t f u n c t i o n and l a b o r , bullock and f e r t i l i z e r demand f u n c t i o n s , t e r a i and h i l l y regions, Nepal Seemingly unrelated regression estimates with Prof i t six restrictions* function .. 'Bara Gorkha Constant:lnA* -5.232 -2.821 (1.045) (0.592) : land L : 0 0.572 0.338 (0.070) (0.054) F Labor (NP): 4 0.369 (0.105) 0.333 (0.067) C a p i t a l (K): * % . 0.127 0.210 * (0.029) (0.042) Extension (XD): BX -0.043 0.085 (0.103) (0.072) ; Age (A): 0 0.240 0.C67 (0.160) (0.112) H Labor (P,) : aN * -0.196 -0.067 (0.042) (0.007) k Bullock (Pb): aB -0.147 -0.083 F e r t i l i z e r (Pf) : a? * (0.040) -0.011 (0.004) -0 013 (0.010) (0.003) Education (ED) : % . 0.357 0.249 (0.132) (0.084) Demand function *E Labor: aN -0.196 -0.067 (0.042) (0.007) * -0.196 -0.067 a~ (0.042) (0.007) *z Bullock: ag , , -0.147 , -0.083 (0.040) (0.004) a *u -0.147 -0.083 - - B (0.040) (0.004) . 'J *E - fertilizer: aF * -0.011 (0.010) -0.013 (0.003) - - r, *u a~ -0.011 (0.010) -0.013 (0.. 003) E I The numbers i n parentheses a r e asymptotic standard e r r o r s of t h e e s t i u a t e s . *These a r e t h e r e s t r i c t i o n s implied by the absolute e f f i c i e n c y of b o ~ h educated and i l l i t e r a t e farmers. of e d u c a t i o n r a i s e s a g r i c u l t r i r a l a u t p u t by 8.51 p e r c e n t (RS 1715) i n t h e t e r a i acd by 6.76 p e r c e n t (RS 633) i n t h e h i l l r e g i o n ( T a b l e l 3 ) . The re- s u l t s a l s o i n d i c a t e t h a t 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 o u t p u t is h i y h e r i n t e c h n o l o g i c a l l y dynamic t e r a i i n t e r n s of 5 0 t h p e r c e n t a g e and t o t a l output increase. E d u c a t i o n ' s c o n t r i b u t i o n t o o u t p u t conputed from p r o f i t f u n c t i c n e s t i m a t e is h i g h e r t h a n t h a t d e r i v e d from p r o d u c t i o n function cqefficients. The above r e s u l t s i n d i c a t e t h a t t h e p r o d u c t i o n and p r o f i t f u n c t i o n based e s t i m a t e s a r e similar b u t n o t i d e n t i c a l . D e s p i t e minor d i f f e r e n c e s i n t h e r e s u l t s , t h e e v i d e n c e from botk models s u p p o r t t h e c o n t e n t i o n t h a t e d u c a t i o n h a s a h i g h e r c o n t r i b u t i o n t o o u t p u t i n t e c h n o l o g i c a l l y dynamic I t e r a i than i n t r a d i t i o n a l h i l l region. The n o n r e j e c t i o n of t h e c o n t e n t i o n by e i t h e r model i n d i c a t e s t h a t t h e f i n d i n g of t h i s s t u d y is r o b u s t re- g a r d l e s s of t h e e s t i m a t i o n tec'nnique employed. V. CONCLUSIONS: Education h a s a h i g h e r c o n t r i b u t i o n t o a g r i c u l t u r a l o u t p u t o r pro- d u c t i v i t y i n t e c h n o l o g i c a l l y dynamic t e r a i t h a n i n r e l a t i v e l y t r a d i t i o n a l hill region. Education c o n t r i b u t e s t o t h e o u t p u t by s i g n i f i c a n t l y im- proving fanner,. d i t e c L p r o d u c t i v i t y (worker) and a l l o c a t i v e ( a l l o c a t i v e ) 0 . I a b i l i t y ( e f f e c t s ) i n both regions. Only t h e i n p u t - a l l o c a t i o n component -. - of t h e a l l o c a t i v e e f f e c t of e d u c a t i o n is c r u c i a l i n t r a d i t i o n a l h i l l . re- g i o n w h i l e b o t h t i . ? i n p u t - a l l o c a t i o n and i n p u t - 3 a l e c t h n e f f e c t s a r e i m - p . p o g t n a t i n t h e modernizing t e r a i r e g i o n . The e d u c a t e d f a r m e r s a r e more economic efficient r e l a t i v e t o t h e i l l i t e r a t e s i n b c t h t e r a i and h i l l r e g i o n s . The h i g h e r economic e f f i c i e n c y of t h e educated i n t h e h i l l r e g i o n i s a r e s u l t of t h e i r b e i n g b o t h s i g n i f i c a n t l y more t e c h n i c a l and a l l o c a t i v e e f f i c i e n t than t h e i l l i t e r a t e s , w h i l e t h a t of t h e educated i n t h e t e r a i emanates from t h e i r being s i g n i f i c a n t l y t e c h n i c a l l y more e f f i c i e n t and o n l y weakly a l l o c a t i v e l y e f f i c i e n t than t h e i l l i t e r a t e s . -4 s i g n i f i c a n t s p i l l o v e r e f f e c t of education s e e m s t o h a v e enabled i l l i t e r a t e s i n t e r a i region t o c a t c h up w i t h t h e educated i n terms of a l l o - cat i v e ef f i c i e f c y. Extension does n o t have any s i p n i f i c a n t c o n t r i b u t i o n t o o u t p u t i n e i t h e r region. Education and e x t e n s i o n a r e weak s u b s t i t u t e s i n t h e farm d e c i s i o n making p r o c e s s i n terai while t h e e f f e c t of t k e i r i n t e r a c t i o n is u n c l e a r i n t h e bil-1 region. Education azd farm e a r n i n g s , and education and rrse of modern i n p u t s a r e p o s i t i v e l y c o r r e l a t e d i n both regions. However, che l e v e l of education add u s e of modern i n n o v a t i o n s a r e much s t r a n g l y c o r r e l a t e d i r dynamic t e r a i t h a n i n h i l l areas. C h i l d m o r t a l i t y and l e v e l of e d u c a t i o n , on t h e o t h e r hand, are n e g a t i v e l y c o r r e l a t e d i n b o t h t e r a i and h i l l r e g i o n s . Production and p r o f i t f u n c t i m models g i v e s i m i l a r ( b u t n o t i d e n t i c a l ) r e s u l t s and e i t h e r can be u t i l i z e d t o a n a l y z e t h e impact of education. Bowever, t h e p r o f i t f u n c t i o n model i s b e t t e r s u i t e d t o s t a t i s t i c a l l y t e s t t h e h y p o t h e s i s concerning t h e worker ( t e c h n i c a l ) , and a l l o c a t i v e ( a l l o c a - t i v e ) e f f e c t s ( e f f i c i e n c i e s ) , w h i l e production f u n c t i o n mcdel appears more . L a measure t h e e f f e c t s of education. suited t o q u ~ n t i t a t i v e l y The f i n d i n g of t h i s s ~ u d yt h u s s u g g e s t s t h a t a development s t r a t e g y combining investment i n a g r i c u l t u r a l technology and human c a p i t a l i s l i k e l y ' t o a c c e l e r a t e t h e a g r i c u l t u r a l development p r o c e s s f a s t e r than- investment i n e i t h e r e e p a r a t e l y . Since t h e educated f a m s r s a r e more e c o n ~ m i c a l l y e f f i c i e n t than t h e i l l i t e r a t e s and t h e i l l i t e r a t e s are g e n e r a l l y s m a l l far- mers i n t h i s s t u d y , t h e outcome of t h i s study a l s o h a s an important iccome d i s t r i b u t i o n impl'cation. Appendix I . Primary l e v e l s c h o o l s , teaching s t a f f and enrollment i n Nepal. Number of Teaching Pupils Year schools staff enrolled Sources: United Nations, S t a t i s t i c a l Yearbook, 1954; UNESCO, S t a t i s t i - c a l Yearbook, 1963, 1967, 1970, 1975, 1976, 1977; HMG, Ministry of Education, Nepal. NA = n o t a v a i l a b l e Appendix X I . Secondary l e v e l t e a c h i n g s t a f f and e n r o l l m e n t i n Nepal *. Teaching Year staff Enrollment Sources: U n i t e d N a t i o n s , S t a t i s t i c a l Yearbook, 1954; UNESCO, S t a t i s t i - c a l Yearbook, 1963, 1967, 1970, 1975, 1976, 1977; and HMG, M i n i s t r y of E d u c a t i o n , Nepal. * I n c l u d e s g e n e r a l , v o c a t i o n a l , and t e a c h e r s t r a i n i n g NA = n o t a p p l i c a b l e Appendix 111. Higher l e v e l t e a c h i n g s t a f f and e n r o l l m e n t i n Nepal. Year Teaching staff Enrollment Sources: U n i t e d N a t i o n s , S t a t i s t i c a l Yearbook, 1954; UNESCO, S t a t i s t i c a l Y e a ~ b o o k , 1963, 1967, 1975, 1976.  Appendix I V : The T h e o r e t i c a l Aspect of t h e P r o d u c t i o n F u n c t i o n Model A c l a r i f i e d and expanded v e r s i o n of t h e p r o d u c t i o n f u n c t i o n frame- work based on Welch's work is p r e s e n t e d below. The purpose of t h i s ap- p e n d i x i s t o show hov v a l u e added, g r o s s s a l e s and e n g i n e e r i n g ( s i n g l e o u t p u t ) p r o d u c t i o n f u n c t i o n s r e s p e c t i v e l y measure t h e t o t a l e f f e c t , . worker and i n p u t - a l l o c a t i o n e f f e c t and o n l y worker e f f e c t . . Consider a farm in which t h e r e a r e two o u t p u t s , Y1 and Y2, and each o u t p u t is a f u n c t i o n of e d u c a t i o n , E , purchased i n p u t s , X, and farm-sup- p l i e d i n p u t s , Z: The v a l u e added (Y) by farm s u p p l i e d i n p u t s and e d u c a t f o n becomes C) where P is p r i c e of j t h o u t p u t and Px i s p r i c e of i n p u t X [ 1 Assume t h a t a l l f a r m e r s do n o t p o s s e s s t h e same a b i l i t y of s e l e c t i n g and o p t i m a l l y a l l o c a t i n g p u r c h a s e d i ( v a r i a b 1 e ) i n p u t s among competing :scs . € and t h a t s e l e c t i o n nnd s u c h an a l l o c a t i o n is a funcefott of e d u c a t i o n : (6) X = f (E) - - '9 Also assume t b a t t h e q u a n t i t y of farm s u p p l i e d i n p u t s is f i x e d i?~ the - s h o r t r u n and.that s - a l l o c a t i o n ( b u t n o t s e l e c t i o n ) of s u c h r e s o u d e s among competing uses depends on e d u c a t i o n : purchased i n ? u t s , i n c l u d i n g t e c h n o l o g i c a l l y b e t t e r new i n p u t s ( i n p u t - selection effect). The e x p r e s s i o n (12) d e m o n s t r a t e s t h a t i f a v a l u e added p r o d u c t i o n f u n c t i o n i s e s t i m a t e d by e x c l u d i n g X and i n c l u d i n g E and Z as an independent v a r i a b l e , che n a r g i n a l va11:e product (MVP) of e d u c a t i o n accounts f o r a l l t h e t h r e e e f f e c t s . I f Y i n (2) i s g r o s s sales and if a g r o s s s a l e s p r o d u c t i o n f u n c t i o n is e s t i m a t e d by i n c l u d i n g X , Z and E as independent v a r i a b l e s , t h e l a s t term i n (12) i s l o s t . The MVP of edu- c a t i o n from t h e g r o s s s a l e s f u n c t i o n c o n t a i n s o n l y t h e worker and i n p u t - allocation effects. 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May 1981. * 81-19 Nancy B i r d s a l l and Oey Meesook, " Child Schooling, Number of C h i l d r e n and I n t e r g e n e r a t i o n a l Transmipsion of I n e q u a l i t y : A S i m u l a t i o n " . May 1981. 81-20 F r a n c o i s O r i v e l , "The Impact of A g r i c u l t u r a l E x t e n s i o n S e r v i c e s : A Review o f 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 V u l g a r i s a t i o n A g r i c o l e : Revue d e l a LittSrature". 81-21 Nancy B i r d s a l l and M. Lc.sise Fox, "Why Males Earn More: L o c a t i o n , J o b P r e f e r e n c e s and J o b D i s c r i m i n a t i o n Among B r a z i l i a n S c h o o l t e a c h e r s " . May 1981. 81-22 A l t h e a H i l l , "The D e m o ~ r a p h i cS i t u t a t i o n i n Sub-Saharan A f r i c a : A D i s c u s s i o n Paper". May 1981. 81-23* R. S a b o t , A. Berry, A. Hazlewood, J. K n i g h t , J. Armitage, M. B o i s s i e r e "Does t h e Expansion of Education Compress 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 o f Pay? A P r e l i m i n a r y A n a l y s i s " . J u l y 1981. 81-24* Nancy B i r d s a l l and Dean T. Jamison. "Income and O t h e r F a c t o r s I n f l u e n c i n g F e r t i l i t y and M o r t a l i t y i n China". October 1981. 8172536 Nancy B i r d s a l l , Sulekha , P a t e l and K. C. Z a c h a r i a h , " 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 Population" . J u n e 1981. * 81-26* Dean T. Jamison, T.J. Ho, and F.L. Trowbridge. "Food A v a : ~ 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 of C h i l d r e n i n China". September 1981. - 81-27* Dean T. Jamison. " Child M a l n u t r i t i o n and School R e t a r d a t i o n i n China". September 1981. - s 81-28 Deborah L h a m o n ' b c m i l l a n . "Language P o l i c i e s f o r A f r f c a n Primary Education: Summary o f t h e Anglophone Research L i t e r a t u r e . " J u l y 1981. 81-29 Tania Thevenin. "Les I m p l i c a t i o n s Pedagogiques d e s P o l i t i q u e s d e l a n g u e s dans l'enseignement en A f r i q u e : Une r e n e d e l a 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 E n g l i s h as "PedagogicdE I m p l i c a t i o n s of Language P o l i c y i n A f r i c a n Schools: A Review o f t h e Francophone L i t e r a t u r e " . V i c e n t e Paqueo. "A Household P r o d u c t i o n Hodel of School Enrol.lment: A P r o b i t Analysis of t h e 1978 B i c o l Multipurpose Survey Data". J u n e 1981 Bryan L. B o u l i e r and V i c e n t e B. Paqueo. "On t h e Theory and Heasurements of t h e Determinants of M o r t a l i t y " . J u n e 1981 Reynaldo M a r t o r e l l . " N u t r i t i o n and H e a l t h S t a t u s I n d i c a t o r s : . Suggestions f o r Surveys o f t h e Standard of Living i n Developing Countries" . J u n e 1981. R. S a b o t , A. Berry, A. Hazelwood, J. i(sigkt, J. Armitage, and M. B o i s s i e r e . " C o r r e l a t e s of E d u c a t i o n a l Attainment i n Tanzania". J u l y 1981. Susan H. Cochrane. "The Determinants of F e r t i l i t y and C h i l d S u r v i v a l i n t h e Nepal T e r a i " . J u l y 1981. Joanne L e s l i e , B.G. Baidya, and K. Nandwani. " 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 P r o t h e r o . " P e r s p e c t i v e s on P o p u l a t i o n M o b i l i t y i n West A f r i c a " . August 1981. Timothy King. " Population Growth, I n t e r n a t i o n a l Resource T r a n s f e r s , and I n t e r n a t i o n a l Migration" . August 1981 Timothy King. " Immigration from Developing C o u n t r i e s : Some P h i l o s o p h i c a l I s s u e s " . August 1981. R. Sabot and J. Knight, "Why Wages D i f f e r : Earnings Functions i n a Poor Urban Economy". August 1981. Joao B a t i s t a d e Araujo e O l i v e i r a and F r a n c o i s q r i v e l . " In- Service Teacher T r a i n i n g System: Logos I1 i n B r a z i l " . August 1981. R. S a b o t , A. Herry, A. Hazlewood, J. Knight, J. Armitage and ! M. g o i s s i e r e . " C o r r e l a t e s of E d u c a t i o n a l Attainment i n Kenya". Augqst. 1981. 6 P e t e r T a l l o n . "Incomes, Poverty and Income D i s t r i b u t i o n i n R u r a l -. B o t y a n a : A S y n t h e s i s of Evidence Based on t h e R u r a l Income E ~iskibution Survey." September 1981. I Barbara Watanabe and Eva Mueller. "A Poverty P r o f i l e f o r R u r a l Botswana." October 1981. Eva H u e l l e r . "The Value and A l l o c a t i o n of T i n e i n Rural Botswana." November 1981.  81-45 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 P r o d u c t i o n i n T r i b a l Areas o f Botswana." September 1981. 81-46 Robert E.B. Lucas. "The D i s t r i b u t i o n o f Wages and Employment i n R u r a l Botswana." September 1981. 81-47 Dov Chernichovsky. "Socioeconomic and Demographic A s p e c t s of School Enrollment and Attendance i n R u r a l Botswana." October 1981. . 81-48 Dov Chernichovsky. "Socioeconomic C o r r e l a t e s of F e r t i l i t y Behavior i n R u r a l botswana." October 1981. 81-49 S h e r r i Kossoudji and Eva Mueller. "The Economic and Demographic S t a t u s o f Female Headed Households i n Botswana." October 1981. 0 0 0 0 81-50 F r a n c o i s O r i v e l . "La T e l e v i s i o n S c o l a i r e du Senegal: Evaluation Economique e t P e r s p e c t i v e s . " Aout 1981. (Summary a v a i l a b l e i n English.) 81-51 H i l l a r y P e r r a t o n , Dean T. Jamison and F r a n c o i s O r i v e l . "Mass Media .: f o r A g r i c u l t u r a l E x t e n s i o n i n Malawi". September 1981 P 81-52 Thomas W. Merrick. "The Impact of Access t o Piped Water on I n f a n t M o r t a l i t y i n Urban B r a z i l , 1970 t o 1976." August 1981. 81-53 N. Krishnan Nambaodiri. " Determinants of F e r t i l i t y i n S r i Lanka." September 1981. 81-54 N. Krishnan Namboodiri. "Age a t Marriage i n S r i Lanka." October 1981. 81-55* R. S a b o t , A. B e r r y , A. Hazlewood, J. Knight, J. Armitage, 13. B o i s s i e r e . "The S t r u c t u r e of Wages i n Kenya and Tanzania: What Role Has Pay P o l i c y P l a y e d ? " October 1981. t . 81-56* R. S a b o t , A. B e r r y , A. Hazlewood, J. Knight, J. Armitage, M. P o l s s i e r e . "Wage Dynamics i n Tanzania and Kenya: P o l i c y S i m u l a t i o n s . " October 1981. - - 'I 81-57 Dov Chernichovsky and Oey A. ~ e e s z o k ."Female Labor F o r c e P a r t i c i p a t i o n 81-58 i n I n d o n e s i a . " October 1981. Z Dov Chernichovsky and Oey A. Xeesbok. P r o f i l e . " November 1981. * "Poveity i n Indoensia: A 81-59 Susan H. Cochrane and Kalpana Nandwani. "The Determinants of F e r t i l i t y i n 22 V i l l a g e s of Northern Thailand." December 1981 81-60 Forthcoming 81-61 Susan H . Cochrane and Dean T. ,Jamison. "The Determinants and Consequences of Educational Achievement i n the Rural Chiang Hai Valley." Decen'uer 1981. 81-62 Rashid Faruqee, Carl Taylor, R.S.S. Sarma, Robert Parker and William Reinke. "Benefits of Integrating Family Planning with I Health Services: The Narangwal Eqerimsnt". December 1981.  POPULATION & H L W RESOURCES DIVISION DISCUSSION PAPERS [A * by t h e number i n d i c a t e s t h e pap+r 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 . ] H i l a r y P e r r a t o n . "Mas3 Media, Basic Education and A g r i c u l t u r a l Extension" . J a n u a r y 1982. K.C. Zachariah and Sulekha P a t e l . "Trends and Determinants o f In2znr and C h i l d M o r t a l i t y i n Kerala" . January L 982. . Som P u d a s a i n i " Education and A g r i c u l t u r a l Ef f i c i c n c y i n Nepal" . January 1982.