The Impact of Fertilizer Subsidies on National Fertilizer Use: An Example from Malawi

This paper examines the impact of government funded fertilizer subsidize on national level fertilizer use. We use panel data to investigate how the 2006/07 fertilizer subsidy program in Malawi impacted farmers' decisions to purchase commercial fertilizer. Using a fixed effects estimator to control for time invariant unobservables, we find that when farmers' ability to acquire subsidized fertilizer is treated as exogenous, it has a significant negative impact on commercial fertilizer purchases. We also find that wealth and social networks have a significantly positive impact on who receives subsidized fertilizer. We then use instrumental variables to control for the endogeneity of subsidized fertilizer acquisition affecting commercial purchases. Using a fixed effects estimator on this model demonstrates that acquiring subsidized fertilizer does not have a significant impact on commercial purchases.

Issue Date:
Publication Type:
Conference Paper/ Presentation
DOI and Other Identifiers:
Record Identifier:
PURL Identifier:
Total Pages:
Replaced with revised version of paper 06/30/08.
Series Statement:
Selected Paper

 Record created 2017-04-01, last modified 2020-10-28

Download fulltext

Rate this document:

Rate this document:
(Not yet reviewed)