Endogeneity Test of Seed on Yield in Nigeria

Abstract

Researchers treated seed technology and crop yield as exogenous, thereby generating bias estimates. In practice, seed technology increases yield and it’s stimulated by social capital and other factors. This paper develops a choice model of maize-seed exogenously, then tested and corrected for causality. A multistage sampling procedure was adopted using seven Agricultural Development Programme zones drawn from purposively selected Oyo and Osun states. A block each was randomly selected per zone. Twenty-one cells were randomly selected, then data were collected from 385 respondents using a structured questionnaire: Data were analyzed using Ordinary Least Square and Two-Stage Least Square α 0.05. Durbin score chi2(1) = 6.65 (p= 0.009) and Wu-Haussmann F (1,37) = 6.431 (p = 0.012), showed reverse causality that was resolved by the Two-Stage Least Square model. The Two-Stage Least Square result indicated that education (β=-0.53), seed quantity (β=-0.13), seed price (β=-0.08), negatively affected the choice of seed and yield while farm size (β=2.05), fertilizer (β=0.004), herbicide (β=0.22), output-price (β=0.02), meeting attendance index(β=0.02), and improved seed ((β=2.66), had a positive influence. Social capital spurs the use of improved seed, thereby increase maize yield. Consequently, active participation in social groups and the use of improved seed is recommended to increase yield.

Keywords

• Endogeneity test
• seed technology
• yield
• social capital