Purdue University Purdue e-Pubs Open Access Dissertations Theses and Dissertations January 2015 Economic Development and Child Nutrition in Nepal Ganesh Thapa Purdue University Follow this and additional works at: https://docs.lib.purdue.edu/open_access_dissertations Recommended Citation Thapa, Ganesh, "Economic Development and Child Nutrition in Nepal" (2015). Open Access Dissertations. 1154. https://docs.lib.purdue.edu/open_access_dissertations/1154 This document has been made available through Purdue e-Pubs, a service of the Purdue University Libraries. Please contact [email protected] for additional information. Graduate School Form 30 Updated 1/15/2015 PURDUE UNIVERSITY GRADUATE SCHOOL Thesis/Dissertation Acceptance This is to certify that the thesis/dissertation prepared By Ganesh Thapa Entitled Economic Development and Child Nutrition in Nepal For the degree of Doctor of Philosophy Is approved by the final examining committee: Gerald E. Shively Chair Raymond J.G.M. Florax Jacob E Ricker-Gilbert Patrick Webb To the best of my knowledge and as understood by the student in the Thesis/Dissertation Agreement, Publication Delay, and Certification Disclaimer (Graduate School Form 32), this thesis/dissertation adheres to the provisions of Purdue University’s “Policy of Integrity in Research” and the use of copyright material. Approved by Major Professor(s): Gerald E. Shively Approved by: Gerald E. Shively 11/23/2015 Head of the Departmental Graduate Program Date ECONOMIC DEVELOPMENT AND CHILD NUTRITION IN NEPAL A Dissertation Submitted to the Faculty of Purdue University by Ganesh Thapa In Partial Fulfillment of the Requirements for the Degree of Doctor of Philosophy December 2015 Purdue University West Lafayette, Indiana ii ACKNOWLEDGEMENTS I am extremely grateful to my major advisor and mentor Prof. Gerald Shively for providing me this research assistantship supported by the Nutrition Innovation Lab, USAID. I consider myself as a very lucky person to receive this opportunity, which helped me to materialize my dream of working on one of the most serious development issues—improving child nutrition outcomes— faced by my country, Nepal. This dissertation was possible only due to his constant feedback, suggestions and active involvement. I would like to thank Dr.Raymond Florax, Dr.Jacob Ricker-Gilbert, and Dr. Patrick Webb for kindly agreeing to serve on my advisory committee and providing support during this process. I would like to thank my department for providing such an excellent facility. I appreciate Lou Ann Baugh’s help taking care of course registration, dissertation formatting and graduate school paper work. Carol Wood’s help on computer issues is highly appreciated. I am also thankful to all of my professors, friends and colleagues who have directly or indirectly contributed in the successful completion of my Ph.D. study. My friends—Manoj Pokhrel (Plant Protection Officer), Bojh Raj Sapkota (Senior Agriculture Development Officer), Arun Kafle (Senior Horticulture Development Officer), Choodamani Bhattarai (Plant Protection Officer) and Nirajan Thapa (Road Engineer) deserves special thanks for all of their help in data collection efforts and iii cooperation in Kathmandu, Nepal. Nepalese Student Society at Purdue (NEPSAP) also deserves special thanks for providing me such a warm environment here in the U.S. Finally, I am highly indebted to my parents (Mr. Ram Bahadur Thapa and Mrs. Menuka Thapa) for their support, encouragement and sacrifices. They are always my sources of aspirations and motivation in my life. I would also like to thank my brother (Balram Thapa) for motivating me to earn higher degree and providing support during those early days. I am also grateful to my youngest sister Geeta Thapa for helping me in my data collection endeavor at Kathmandu. Last but not least, I want to thank my wife Neetuka for all her patience, sacrifices, endless support, and help during this long strenuous journey. I also like to thank god for bestowing me with everything leading to the successful completion of the Ph.D. iv TABLE OF CONTENTS Page LIST OF TABLES ............................................................................................................ vii LIST OF FIGURES ............................................................................................................ x ABSTRACT ..................................................................................................................... xiii CHAPTER 1. INTRODUCTION ....................................................................................... 1 CHAPTER 2. DETERMINANTS OF FOOD PRICES AND FOOD PRICE VARIANCE IN NEPAL .......................................................................................................................... 6 2.1. Introduction .................................................................................................. 6 2.2. Background ................................................................................................ 16 2.2.1. Local markets ...................................................................................18 2.2.2. Regional markets .............................................................................19 2.2.3. The central market ...........................................................................25 2.2.4. Border markets .................................................................................26 2.2.5. Transportation and fuel prices .........................................................27 2.2.6. Agricultural production ...................................................................33 2.3. Data ............................................................................................................ 35 2.4. Empirical Strategy ...................................................................................... 40 2.5. Results and Discussion ............................................................................... 47 2.5.1. Agriculture production instrumenting equation ...............................47 2.5.2. Diagnostic testing ............................................................................47 2.5.3. Test of market segmentation and market integration ......................51 2.5.4. Mean equation .................................................................................51 v Page 2.5.5. Variance equation ............................................................................54 2.6. Conclusion and Policy Implications ........................................................... 60 CHAPTER 3. CHILD MALNUTRITION IN NEPAL: A HIERARCHICAL APPROACH ..................................................................................................................... 63 3.1. Introduction ................................................................................................ 63 3.2. Background ................................................................................................ 70 3.3. Conceptual Framework .............................................................................. 74 3.4. Empirical Strategy ...................................................................................... 77 3.4.1. Level-1 model (child-level) .............................................................80 3.4.2. Level-2 model (household-level) .....................................................81 3.4.3. Level-3 model (cluster-level)...........................................................82 3.4.4. Level-4 model (district-level) ..........................................................83 3.5. Data and Variables ..................................................................................... 86 3.5.1. The Nepal demographic and health survey (NDHS) .......................86 3.5.2. The Nepal living standards survey (NLSS) .....................................91 3.5.3. The normalized difference vegetation index (NDVI) ......................92 3.5.4. Rainfall ............................................................................................94 3.5.5. Agriculture production and storage .................................................95 3.5.6. Transportation ..................................................................................95 3.5.7. Health infrastructure ........................................................................96 3.6. Results ........................................................................................................ 98 3.6.1. Descriptive results ................................................................................... 98 3.6.2. Empirical results .................................................................................... 105 3.7. Robustness Check .................................................................................... 129 vi Page 3.8. Conclusions, Policy Implications and Limitations ................................... 137 CHAPTER 4. INFRASTRUCTURE AND CHILD NUTRITION IN NEPAL ............. 142 4.1. Introduction .............................................................................................. 142 4.2. Background .............................................................................................. 152 4.2.1. Child nutrition and road infrastructure in Nepal ................................... 152 4.3. Conceptual Framework ............................................................................ 156 4.4. Empirical model ......................................................................................