The impact of farmers' health and nutritional status on their productivity and efficiency: Evidence from Ethiopia

In this article we provide empirical support for the link between health and nutritional status and agricultural productivity in Ethiopia. Our results show that the distance to the source of water as well as nutrition and morbidity status affect agricultural productivity. The market wage rate is also very responsive to the weight-for-height as well as the body-mass index and height. It is remarkable that elasticities of labor productivity with respect to nutritional status are strong and similar in technology estimates and wage equations, particularly in a context where separability between consumption and production decisions of the household is rejected. Returns to investment in nutrition are clearly high in the Ethiopian context. The fact that they are close to an upper bound of what has been found in other countries is consistent with the very low living standards of Ethiopian peasants. The results show a large scope for productivity improvement through better nutrition. The type of distribution chosen for the one-sided term influences the estimates of technical inefficiency. But, in all cases, the results indicate substantial loss in output due to technical inefficiency even after accounting for the health and nutrition of workers.