Shoumitro Chatterjee

In this paper, I argue that market power of intermediaries plays an important role in contributing to low incomes of farmers in India. I study the role of spatial competition between intermediaries in determining the prices that farmers receive in India by focusing on a law that restricts farmers to selling their goods to intermediaries in their own state. I show that the discontinuities in market power generated by the law translates into discontinuities in prices. Increasing spatial competition by one standard deviation causes prices received by farmers to increase by 6.4%. To shed light on spatial and aggregate implications, I propose and estimate a quantitative spatial model of bargaining and trade. Using this structural model, I estimate that the removal of the interstate trade restriction in India would increase competition between intermediaries substantially, thereby increasing the prices farmers receive and their output. Estimates suggest that average farmer prices and output would increase by at least 11% and 7% respectively. The value of the national crop output would therefore increase by at least 18%.
Following mid-20th century predictions of Malthusian catastrophe, fertility in the developing world more than halved. We analyze how fertility change related to economic growth during this episode, using data on 2.3 million women from 255 surveys in 81 countries. We find different responses to fluctuations and long-run growth, both of them heterogeneous over the lifecycle. Fertility was procyclical but also declined and delayed with long-run growth; fluctuations late (but not early) in the reproductive period affected lifetime fertility. The results are consistent with economic models of the escape from the Malthusian trap, extended with a lifecycle and liquidity constraints.

Publications

Six Puzzles in Indian Agriculture

The India Policy Forum, 2016-17

with Devesh Kapur

A quarter century after India’s historic shift to a more market-oriented economy, the agriculture sector continues to be racked by severe policy distortions, despite its importance for the livelihoods of the majority of India’s population and in addressing major long-term challenges facing the country, from food security to natural resource sustainability. The paper highlights some key empirical realities and data anomalies to raise some fundamental questions about Indian agriculture and anchors the analysis in six major puzzles: prices; procurement; political economy; trade; productivity; and exit. While the list is neither exhaustive nor original in and of itself, these puzzles raise important policy issues. We conclude by arguing that more unified frameworks of analysis are needed for effective policy in a much neglected but crucial sector for securing India’s future.
Media Coverage: The Financial Express, June 16, 2017.

Work in progress

The Water Gap: Environmental Effects of Agricultural Subsidies in India

[Extended Abstract]

with Rohit Lamba and Esha Zaveri

Markup vs. Quality: Response of Indian Firms to Rise of China

with Arpita Chatterjee