Estimating Returns to Soil and Water Conservation Investments - An Application to Crop Yield in Kenya
Productivity gains from soil and water conservation (SWC) have empirical support in research stations. Previous empirical results from on-farm adoption of SWC are, however, varied. This study investigated the impact of soil conservation investment on farm productivity in three regions in Kenya. Using plot-level survey data, we focused on land productivity on plots with and without SWC. We tested the overall soil conservation hypothesis that increased SWC is beneficial for yield, as well as more specific hypotheses that SWC affects levels of inputs, returns from these inputs, and crop characteristics. The results showed a mixed picture where plots without SWC generally have higher yield values per hectare. However, plots with SWC are significantly steeper and more eroded than plots without SWC. A more careful analysis of a two-stage random effects–switching regression estimation comparing three SWC technologies to plots without SWC indicated that SWC increased the returns from degraded plots and sometimes from other inputs. A simulation exercise based on these estimations also showed that, in most cases, adoption has been beneficial for those who have done it and would be beneficial for those who have not.
Working Papers in Economics