Differential Disequilibrium Dynamics: A Schultzian Perspective on Producer Response to a Policy Shock

Little empirical work has quantified the transitory effects of macroeconomic shocks on farm production behavior or on interhousehold differences in response to disruptions. We develop a simple analytical model to explain how macroeconomic shocks might temporarily divert managerial attention, thereby affecting farm-level productivity, but perhaps to different degrees and for different durations across production units. We then successfully test hypotheses from that model using panel data bracketing massive currency devaluation in Côte d’Ivoire. We find a sharp, transitory increase in mean plot-level technical inefficiency among Ivorien rice producers and considerable variation in the magnitude and persistence of this effect, attributable largely to ex ante complexity of operations, and the gender and educational attainment of the manager. 1