The Department of Economics takes immense pride in announcing the publication of the research paper, “Determinants of Rural Households’ Income Inequality in India” authored by Dr Ghanshyam Pandey, Assistant Professor. The paper has been published in the Journal of Agricultural Economics Research Review (ABDC-C), and has an impact factor of 0.19. Dr Pandey’s paper examines the factors that determine income inequality among rural farm households in India and discusses the implications of the findings for policymakers, practitioners, and researchers. The study highlights how addressing the identified factors could potentially reduce income inequality among rural farm households and improve the overall well-being of the rural population.

Abstract

This study has identified the drivers of income inequality in rural India using IHDS 2011–12 national-level survey. The inequality decomposition methodology developed by Fields (2003) based on a two-way regression methodology has been used. The study has modified the previous regression based inequality decomposition technique by accounting for diverse income sources and regimes as well as by effectively correcting for selectivity in the various income regimes. The CLAD model has been used to distinguish the determinants of income inequality in rural India. The study has indicated that income inequality in farm households can be attributed to the level of education, family size, caste/social group composition, and composition in land ownership and that family size and land ownership are instrumental primarily due to off-farm labour income. The study has shown that education is a significant factor in income inequality due to its impact on off-farm work income. The study has suggested that a continued increase in variability in land distribution may exacerbate income inequality in households in rural India.

Link to the Article

Pandey G and Devi B (2023). Determinants of rural households’ income inequality in India. (2024). Agricultural Economics Research Review, 36(2), 213-225. https://epubs.icar.org.in/index.php/AERR/article/view/150669

The Department of Economics is thrilled to announce the publication of Assistant Professor Dr Ghanshyam Kumar Pandey’s research paper titled, “Bifurcation and Agricultural Development in Jharkhand,” in Economic and Political Weekly. The paper delves into the developmental trajectory of Jharkhand following its bifurcation from Bihar in 2000 and examines the intricacies of agricultural development and the key determinants that have shaped its evolution post-separation.

Abstract:

The cropping pattern in Jharkhand has significantly changed from 2000 to 2016, with shifts from the cultivation of cereals to non-cereals. An increase in the crop area and diversification towards high-value crops have accelerated overall agricultural growth. Capital formation and better infrastructure facilities, along with improved fertiliser consumption and irrigation, will foster agricultural development in Jharkhand

Practical implementation:

This study shows the development path of Jharkhand after bifurcation from Bihar in 2000. The study deals with the process of agricultural development and determinants of agricultural development after its bifurcation.

Link to the article

The rate of inflation has been termed to be directly proportionate to economic activity, with the increase in economic activity leading to higher levels of inflation. Central Banks have used this relationship to formulate interest rates and understand the inflation–unemployment dynamics in many countries. Dr Adviti Devaguptapu, Assistant Professor from the Department of Economics, has published an interesting study in her paper titled “Phillips Curve in Canada: A Tale of Import Tariff and Global Value Chain”, where she examines the relationship between inflation-economic activity in Canada to better understand the correlation between inflation and unemployment rates.

Abstract

The paper examines the Phillips curve for Canada from June 1976 to October 2022 in a time-varying manner. The findings reveal that the impulse response of inflation to the changes in the unemployment rate gap has reduced over time till 2010 and strengthened thereafter. The response of inflation to the changes in the unemployment rate gap has increased in short and medium horizons after 2010. On further examination, it is found that the changes in both average import tariff and forward participation in the global value chain have reduced the inflation response to the changes in the unemployment rate gap.

Social Implications of the Research

Inflation-targeting central banks should have to put more (less) effort into achieving price stability in the medium run when the change in the level of inflation to the changes in the unemployment rate gap is more (less).

Dr Adviti’s research works towards developing quality-adjusted inflation in India – the need for it and the challenges in recording it.

Link to the article

Heat stress negatively affects crop yield and its impact has increased over time. Researchers in India study this situation with utmost priority. Consequently, Dr Ghanshyam Kumar Pandey, Assistant Professor in the Department of Economics at SRM University-AP has co-authored a paper with Pratap S Birthal and et. al titled “Benefits of irrigation against heat stress in agriculture: Evidence from wheat crop in India” in the journal Agricultural Water Management, Vol 255, having an Impact factor 4.02.

Applying the fixed effects regression technique to the highly spatially disaggregated district-level data from 1966–67 to 2011–12. This paper has assessed the impact of heat stress on wheat production in India and concurrently evaluated the role of irrigation in offsetting its harmful impact. The study has brought out three key highlights:

(i) Heat stress negatively impacts crop yield, and the impact has increased over time.
(ii) Irrigation, besides its contribution towards improving crop yield, also moderates the harmful impact of heat stress, but over time its effectiveness has declined.
(iii) The measure of heat stress built on multiple aspects of excess temperature (i.e., intensity, persistence, and frequency) explains variation in crop yield better than working on a single aspect of it.

Given the increasing scarcity of irrigation water and rising temperature, these findings suggest the need for exploring technological and policy options for improving irrigation water use, efficiency, and breeding of crops for heat tolerance and low water footprints.

This research paper is written in collaboration with ICAR-National Institute of Agricultural Economics and Policy Research, PUSA, New Delhi. Dr Ghanshyam’s future projects are focused on climate change and agriculture, and the effect of climate change on the livestock sector in India.

Read the full paper here: https://doi.org/10.1016/j.agwat.2021.106950

Dr Balaga Mohana Rao, Assistant Professor from the Department of Economics has been awarded the best PhD thesis award in the 59th IIT Bombay convocation held on August 07, 2021. The thesis titled The Early Warnings of the Impending Currency Crises and the Ensuing Macroeconomic Costs aims to develop an Early Warning System to identify the Currency Crises that would help in preventing an impending crisis and also in mitigating the devastating aftermath effects if that occurred.

The financial crises have enthused a huge theoretical and empirical debate in current times due to their recurrent nature in the history of economics. To highlight the importance of an economic crisis among various sections, Kaminsky et al. (1998) quote Kindleberger (1978) saying that academics are interested in a crisis as they have had a history of fascination for the crises, policymakers are interested because they want to prevent the crisis, and financial market participants are interested as they can make money out of it. The financial crises can be divided into two broad categories—currency and sudden stop crises, and debt and banking crises. The currency crises have not only swept away Argentina (2001), Brazil (1998–1999), Latin America (the 1980s), Russia (1998), Southeast Asia (1997) and UK (1992) (to name a few) but they also have caused serious economic adversities to India and BRICS in the recent past. A currency crisis encompasses one of the following four features or a combination of them owing to a speculative attack—both successful and unsuccessful attacks—on a currency: A sharp depreciation of a currency (possibly followed by devaluation) and/or huge depletion of foreign exchange reserves or an increase in interest rates by the central bank or imposing restrictions on capital flows. In this context, Dr Balaga Mohana Rao’s thesis focuses on developing an early warning system to identify the impending crises, finding the common determinants of currency crises and the aftermath effects on macroeconomic indicators.

“One may wonder why the crisis should be prevented or mitigated. The reason is that a full-blown crisis will not be just confined to the foreign exchange market or some other segment, but it will affect the whole economy” Dr Balaga said. He plans to extend his PhD work on Currency Crises and see it in the context of the International Price System.