Indira Gandhi Institute of Development Research

About: Indira Gandhi Institute of Development Research is a facility organization based out in Mumbai, Maharashtra, India. It is known for research contribution in the topics: Monetary policy & Inflation. The organization has 307 authors who have published 1021 publications receiving 18848 citations.

Structure and dynamics of non-suburban passenger travel demand in Indian railways

Abstract: In this paper we derive long run structural relationships for all the three classes, viz. upper, second and ordinary second class, of non-suburban long distance passenger transport demand for Indian railways using annual time series data for 1970–1995. We employ some of the recent developments in multivariate dynamic econometric time series modeling including estimation of long-run structural cointegrating relationships, short-run dynamics and measurement of the effects of shocks and their persistence on evolution of the dynamic passenger transport demand system. The models are estimated using a cointegrating vector autoregressive (VAR) modeling framework, which allows for endogeneity of regressors. The demand systems are found to be stable for all the classes in the long run and they converge to equilibrium in a period of around 2–4 years after a typical system-wide shock. Any disequilibrium in the short-run is corrected in the long-run with adjustments in passenger transport demand and the price variable, i.e. real rate charged per passenger kilometer. Results show that travel demand in all classes would rise with income, although the rise is less than proportionate in the case of ordinary class. High price elasticity in long-run and short-run impulse responses indicate that passenger fare hike could lead to substantial decline in travel demand leading to decline in revenue earnings of the railways.

Farm size, livelihood diversification and farmer’s income in India

Abstract: The basic objective of this study is to analyse the role of farm size and diversification in determining farmer’s total income from both farm and non-farm sources. Using data from NSS 70th Round Situation Assessment Survey, we estimate a log-linear regression model that relates farmer’s income to farm size, on-farm and off-farm diversification, and various other control factors representing farm, household and locational characteristics. We estimate this model for total income over the whole year and separately for the two seasons, kharif and rabi. We find that farm size has a negative relationship with farmer’s income per capita after controlling for various factors. Our results also lend support to our hypothesis that there is an optimal level of diversification that maximizes farmer’s income. We find that the optimal number of crops to be engaged in is 2 in both seasons, 2 animal husbandry activities in both seasons, 4 non-farm activities in kharif and 3 non-farm activities in rabi season. Comparing these estimates with the actual levels as per the NSS data shows that farmers on an average are already engaged in the optimal number of crops, but they are at sub-optimal level in terms of animal husbandry and non-farm activities. We also find that there is a minimum threshold level of education, viz., “Literate with Formal Schooling”, required to improve income levels. NSS data show that on an average, marginal and small farmers who constitute nearly 85 per cent of agricultural households have an education level below this threshold. Thus, improving their education levels is another point for policy intervention that can help raise their income levels. Another interesting finding from our analysis is that participating in MGNREGS may have an adverse impact on income levels, possibly via the opportunity cost of time spent in such public works.

Strategic trade policy for network goods oligopolies

Abstract: We analyze strategic trade policy for differentiated network goods oligopolies under alternative scenarios, when there is export rivalry between two countries. We show that, under price competition without managerial delegation, it is optimal to tax (subsidize) exports, if network externalities are weak (strong). But, the oppos ite is true under price competition with relative performance based managerial delegation in firms. In contrast, under quantity competition, the optimal trade policy always involves subsidization of exports. Nonetheless, the optimal rate of export subsidy under quantity competition is always higher than that under price competition. We also show that, under quantity (price) competition without managerial delegation, trade policy interventions in the presence of sufficiently strong (weak or very strong) network externalities lead to higher social welfare of each exporting country compared to that under free trade. However, under quantity (price) competition with managerial delegation, trade policy interventions result in Pareto inferior outcomes always (unless network externalities are strong).

Deregulation, Ownership, and Productivity Growth: Evidence from Indian Banks

Abstract: This paper analyzes the relationship between deregulation and productivity growth in the context of a mixed developing economy. A generalized shadow cost function approach is used to model the effects of regulation and measure total factor productivity growth. We use a panel of Indian private and public sector banks, observed during 1985-1996, to empirically examine the effect of deregulation on productivity. A disaggregated analysis is done for public and private banks to examine the presence of ownership effects. Our results indicate that significant decline in regulatory distortions and the anticipated increases in total factor productivity growth did not materialize in Indian banking following deregulation. While private sector banks improved their performance mainly due to the freedom to expand output, public sector banks did not respond well to the deregulation measures.