Research Repository :: Browsing by Author "Kahyarara, Godius W."

Browsing by Author "Kahyarara, Godius W."

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Are Charcoal Makers Willing to Participate in a Scheme of Payment for Environmental Services: A Choice Experiment in the Coastal Forest of Tanzania
(2010) Kahyarara, Godius W.
Economic instruments such as Payment for Environmental Services (PES) have become very popular to jointly address poverty alleviation and sustainable management of natural resources. In this paper we focus on the suppliers of the environmental services in a case study in the Coastal Belt Forests of Tanzania. A Choice Experiment is conducted to determine charcoal makers' willingness to participate in a PES scheme and the compensation necessary to make them give up their destructive – but vital income generating – forest activities, mainly charcoal production. We find that this willingness does exist, especially if other cash generating alternatives are offered. However we also conclude that a PES alone will not be sufficient to halt the destruction of the Coastal Forests if nothing is done to curb the growing urban demand for charcoal.
Competition Policy, Manufacturing Exports, Investment and Productivity: Firm-Level Evidence from Tanzania Manufacturing Enterprises
(2004) Kahyarara, Godius W.
The major objective of this study is to answer the question: to what extent is firmlevel performance measured by investment, productivity and export influenced by government measures aiming to stimulate competition and protect consumers against monopoly? To analyse this influence, the study assesses the effect of control of dominant firms through institutions, the effect of mergers to prevent industries becoming monopolized and the effect of control of anti-competitive behaviour. The analysis focuses on assessing firm-level effects due to existing government efforts to regulate business activity in order to ensure that it operates in the public interest. In particular, the study analyses the role of competition policy in influencing productivity, investment and export performance of Tanzanian manufacturing enterprises. The study focuses on the hypothesis that fair competition has a causal impact on the quality and quantity of manufactured exports, productivity and investment.
Does Effeciency Wage Hypothesis Hold in Tanzanian Labour Market?
(University of Dar Es Salaam, 2014) Kahyarara, Godius W.
The primary objective of this paper is to test the hypothesis of efficiency wage in the context of Tanzania labour market. The test is facilitated via estimating the correlation between firm level productivity and firm level weighted average wage in Tanzania manufacturing enterprises. The study uses panel dimension of the data to estimate Cobb Douglas’ production function that controls for time invariant characteristics. It also estimates translog production functions to allow for factor substitution. Estimates based on Cobb Douglas production function suggests that controlling for firm fixed effects, one percent increase in real wage results into 0.28 percent increase in productivity. The estimates are stable even when translogs are estimated, though they are reduced up to 0.2. Such findings are taken as evidence of the existence of efficiency wage in Tanzania’s labour market, as wage level can account for about twenty percent of observed productivity in a firm. The paper concludes that firms can use efficiency wage as a policy to induce increased productivity. Partly, this may be due to the fact that a wage premium above the market tends to discourage worker shirking, reduce worker turnover, and mitigate worker adverse selection behaviour. Finally, it is evident that efficiency wages are highly correlated with unobserved firm specific characteristics, suggesting that firms with some characteristics self-select into payment schemes that have efficiency wage aspects.
The Dynamics of Returns to Education in Kenyan and Tanzanian Manufacturing
(University of Oxford, 2006-05-10) Söderbom, Måns; Teal, Francis; Wambugu, Anthony; Kahyarara, Godius W.
We use micro data on manufacturing employees in Kenya and Tanzania to estimate returns to education and investigate the shape of the earnings function in the period 1993-2001. In Kenya, there have been long run falls in the returns to education while for Tanzania there is evidence of rising returns in the 1990s. The earnings functions are convex for both countries and this result is robust to endogeneity. Convexity may be part of the explanation as to how rapid expansion of education in Africa has generated so little growth if expansion has been concentrated at lower levels of education.
Education and Wage in East and West Africa
(2013-06) Kahyarara, Godius W.
This paper examines the extent to which levels of education of a wage employee account for wage difference in a selected sample of workers in Kenya, Tanzania, Uganda, Madagascar, Ghana, Niger, Guinea Conakry, Rwanda, Benin and Togo. The paper uses country specific factors to control for omitted variable bias. Using OLS and Control function estimates, the paper confirms significant wage difference accounted for by education attainment. Estimates of the models suggest a positive correlation between education and wages.The square term of schooling is highly significant indicating nonlinearity of the returns to education, such that at higher levels of education the marginal returns to schooling is greater than the marginal returns to schooling at lower levels of education. The paper shows strong evidence that at primary level of education there is wage difference of 4.82 per cent due to one year of education, while middle school graduates have 6.3 per cent wage premium and so on. Country specific attributes have a positive influence on the extent of wage differences by country. Thus, it is likely that wage differences of education are a result of self-selectivity.
Firm Growth, Productivity and Earnings in Tanzanian Manufacturing 1992-1999
(University of Oxford, 2002-01) Harding, Alan; Kahyarara, Godius W.; Rankin, Neil
This report has been prepared by Alan Harding, Godius Kahyarara and Neil Rankin with additional contributions from Francis Teal and Måns Söderbom. It is intended to provide a general overview of some of the main findings of Wave 4 of the Tanzanian Manufacturing Enterprise Survey (TMES). The data is still subject to revision in the light of new information being obtained. A final report will include more comprehensive information and additional topics. The opinions, figures and estimates set forth the report are the responsibility of the authors, and should not necessarily be considered as reflecting the views or carry the endorsement of CSAE, ESRF or UNIDO. The data for 1992-95 which is used in this report was collected by a team from the Helsinki School of Economics and University of Dar es Salaam. These three surveys were part of the Regional Program on Enterprise Development (RPED) organised by the World Bank. The original questionnaire was designed by a team from the World Bank. The data for 1996-98 was collected by a team from the Centre for Study of African Economies, University of Oxford and the Economic and Social Research Foundation (ESRF), Dar es Salaam with funding from the UK’s Department for International Development (DFID). The National Bureau of Statistics in Dar es Salaam and the regions provided invaluable support.
General or Vocational Education? Evidences from the Returns to Education in Tanzanian Manufacturing Firms
(2006-03) Kahyarara, Godius W.; Teal, Francis
Although the debate over the returns to vocational versus general education has become an important research in education, adequate empirical work in Africa is still lacking. We add new evidence to this debate by comparing returns to vocational and general education of workers in Tanzanian manufacturing firms. Whereas most of the previous evidences are based on cross sectional data, this paper provides a comparison of the returns to general and vocational education using firm level panel data with substantial information that allows a control for time invariant firm attributes, endogeneity of education and other worker- firm characteristics. Findings of this paper are that general education is more rewarding than vocational education and on the job training. The marginal rates of returns to one year of education ranges between 4.8 and 17.5 percent compared to the rates of returns to one year of vocational education that ranges between 1.4 and 2.8 percent. The results are stable even after we control for endogeneity, firmworker characteristics and firm fixed effects. Therefore we reject the hypothesis that returns to vocational training are higher than the returns to general education. The paper also shows that at high level of general education unemployment in the Tanzanian labour market is low. Based on this paperís findings vocational education cannot substitute general education. Hence it is justifiable for individuals to acquire more of general education and acquire vocational education and training after general education. There is economic rationale for allocating more resources to the general education.
Market Competition and Performance of Tanzanian Manufacturing
(Academic Star, 2013) Kahyarara, Godius W.
The paper analyses the impacts of market competition on performance of firms in developing countries. The critical empirical question addressed by the paper is the question ‘Why competition has not boosted firm level performance?’ The paper addresses the questions by using panel data to estimate productivity effects of competition controlling for firm fixed effects and other determinants of productivity. Estimates of a Cobb Douglas production function. Competition is measured using the Hirschman-Herfindahl Index (HH) as competition variable indicates that 1 percent increase in competition results into 0.4 percent increase in productivity. However, the results are not robust when GMM and Fixed effects estimates are applied suggesting; biasness of OLS estimates and the fact that more productive firms are likely to self select into more competitive firms. Furthermore, the results indicate a positive correlation between firm specific characteristics with competition which influence profitability. Major conclusion of the paper is that there are broad ranges of micro level characteristics that influence firm performance that are not entirely addressed by macro level reforms including competition. Policy actions to tackle down are needed before we can expect trickle down to materialize.
Optimization of the Charcoal Chain in Tanzania
(2007-05) Van Beukering, Pieter; Kahyarara, Godius W.; Massey, Eric; di Prim, Sabina; Hess, Sebasatiaan; Makundi, Victor; van der Leeuw, Kim
The high reliance on charcoal makes Tanzanian producers, traders and consumers vulnerable for environmental problems such as deforestation. Increasing the sustainability of the charcoal chain in Tanzania calls for a comprehensive approach that accounts for a multitude of aspects (e.g technological, economic, social and environmental issues). At present, the development of such a comprehensive policy is hampered by lack of information about the charcoal chain as well as the limited recognition of policy makers in Tanzania of the interdependencies between the segments within the charcoal chain. This paper aims to provide a comprehensive analytical overview of all three components of the charcoal sector: production, trade and consumption. This overview contributes to the development of a comprehensive policy regarding the role of charcoal in Tanzania’s energy strategy. Preliminary lessons drawn from the available sources of information include the following: (1) The vast magnitude of the industry implies that changes in the sector can only be realized gradually with a comprehensive approach as a basis. Sudden interventions such as the ban on charcoal production and trade are counter-effective; (2) Despite the high environmental awareness among the charcoal producers, their poverty leaves no alternative but to continue the profession of charcoal making. Lack of alternative livelihood options, prevent them from shifting to more sustainable income sources; (3) Kiln efficiency is extremely low, thereby enhancing the rate of deforestation. Projects supporting the improvement of kiln efficiency would greatly support local communities as well as the environment. (4) Charcoal induced deforestation causes ample externalities, such as downstream water shortages. Because of these relationships, innovative economic instruments such as Payments for Environmental Services (PES) could be considered. (5) Current policies directed at the charcoal chain are inefficient in many ways. The command and control policies dominating the approach of the current Tanzanian government need to be supplemented by market-based approaches.
Outcomes of Worker Effort and Supervision in Tanzanian Labour Market
(2014) Kahyarara, Godius W.
This paper examines the impact of work effort and supervision in the Tanzanian labour market. In particular it focuses on the extent to which observed earnings and productivity of a worker might be influenced by both the individual effort of a worker and intensity of supervision. To assess the earnings effect of work effort, the paper estimates the hourly earnings equation, which includes work effort and monitoring intensity among the determinants of the hourly earnings. The estimates control for unobserved firm specific effects and GMM production functions. Key findings of the paper are that a worker who exerts higher effort at work increases hourly earnings by about 27 per cent. Estimates of productivity affect via GMM shows that increase in the monitoring intensity increased the gross output per employee by about 34 per cent. The estimated coefficient is stable even after a range of factors are controlled for. The paper concludes that labour market reforms introduced in Tanzania on increased autonomy and flexibility of firm level work supervision and pay have positive outcomes for both employers and employees.
Poverty and Deforestation around the Gazetted Forests of the Coastal Belt of Tanzania
(Mkuki na Nyota Publishers, 2002) Kahyarara, Godius W.; Wilfred, Mbowe; Omari, Kimweri
Thisstudy examinesthe relationship between poverty1 and deforestation2 around the gazetted forests3 of Kazimzumbwi, Pugu, Mabwe Pande, Kongowe and Pongwe in Dar es Salaam and Coast regions. It examines pressure exerted on the reserved forests by the nearby population and economic forces in the surrounding towns. The research findings show that, there is a profound and vicious-cycle between poverty and deforestation in the studied areas. Low-income people dominate the studied areas, where there is low investment in human capital (the majority of the people did not complete even the primary school education). As a result, there is low productivity in economic activities. Agriculture, for example is done using poor methods such as slashing, burning, and shifting cultivation. Many people in the surveyed areas have limited alternative, hence tend to rely on easily accessible forest resources to earn a living. Incomes from forest related activities seem to be stable and double the household income. Such a situation accelerates deforestation, which subsequently reduces resources available to the society. Further, findings show that although legally reserved, the forests have been exposed to continuous pressure for competing economic uses. As access to the reserved forests, management of the forests becomes extremely important. Despite the fact that the majority of the people have some knowledge about the effects of deforestation, the knowledge seems to be insufficient, and is uncoordinated and effected. It is observed in the report, that off-farm activities in the studied areas have been rising. Returns from these activities do complemente those from farm activities.
The Returns to Vocational Training and Academic Education: Evidence from Tanzania
(University of Oxford, 2007) Kahyarara, Godius W.
In this paper we ask what can account for the continuing strong preference for academic education in Africa where the level of development is so low and there are few wage jobs and which form of educational investment, the academic or vocational, is most profitable. We argue that the answers to these questions are linked through the shape of the earnings function and the importance of firm effects. High levels of academic education have far higher returns than those available either from vocational or lower levels of academic. However at lower levels the vocational return can exceed the academic.
Some Background on Tanzania Forest Policy, Institutions and the Forest Land Tenure System
(2014) Kahyarara, Godius W.
Approximately 40 percent of total land area of Tanzania, equivalent to 33.5 million hectares, is covered by forests and woodlands. In term of economic value Zahabu (2006) estimated that if forest resources were managed in a suitable and efficient manner, the sectors’ contribution could be between US$ 1.3 and 3.0 billion per year. However, almost two-third of Tanzania forest land consist of public land that typical lacks proper management and is subject to severe pressure. Most of the land is owned by the government but under de facto open access. Shortage of land and unclear tree and land tenure, particular for women, have hampered forestry investment on private and village lands. This chapter provides an overview of forest policy and land tenure reforms stretching from independence in the 1960s to the present. Unfortunately, these reforms have so far not solved the problems of deforestation and degradation, but national forest policy is undergoing reversions based on the principle that people who depends on forests must be involved in their management.
Tanzania Manufacturing Export and Growth: A Cointegration Approach
(University of Dar Es Salaam, 2013) Kahyarara, Godius W.
This paper examines the long run relationship between exports and growth of Tanzania manufacturing sector. It does so by estimating an endogenous growth model on time series data from 1961 till 2010. The paper also estimates the short -term dynamic behaviour of Tanzania's growth function of manufacturing value added via the error correction model. The results suggest a long run relationship between exports and growth. Analysis of aggregate statistics of trends in performance of Tanzania manufacturing suggest that manufactured exports have grown faster than growth in recent years due to the fragmentation and internationalization of industrial activity. Furthermore the paper shows that the error correction term is correctly signed and statistically significant. Tanzania has experienced a positive growth ranging at 5 percent annually for the last decade from 2000s.
To train or to Educate? Evidence from Tanzania
(2006-09) Kahyarara, Godius W.; Teal, Francis
How do the returns to academic education compare with those from vocational education and training? We address this question for Tanzania allowing for the entry level into vocational education and for the characteristics of the employing firm. If the firm fixed effect captures unobserved worker quality then the return to vocational education, at the level at which it occurs, exceeds that on academic education. However the return to any form of vocational training is less than that achieved by those who reach A-Level and above. While those with current training earn more this effect disappears once we allow for firm fixed effects.

Browsing by Author "Kahyarara, Godius W."

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