Off-Farm Labor Supply and Fertilizer Use

I develop a two-period stochastic dynamic programming model to explain the interaction between fertilizer use and off- farm labor supply. Using a well-known sample of Indian farmers, I find that fertilizer use responds strongly to the village wage and that irrigation raises fertilizer use, while larger farmers use less fertilizer (per acre) than smaller ones. Response to one-sided production shocks is stronger for female labor, indicating that it is more important for smoothing consumption than male labor