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Reconsidering Conventional Explanations of the Inverse Productivity-Size Relationship

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Author Info

  • Christopher B. Barrett
  • Marc F. Bellemare
  • Janet Y. Hou

Abstract

The inverse productivity-size relationship is one of the oldest puzzles in development economics. Two conventional explanations for the inverse relationship have emerged in the literature: (i) factor market imperfections that cause cross-sectional variation in household-specific shadow prices and thereby induce variation in input application rates; and (ii) the omission of soil quality measurements that are inversely correlated with farm or plot size but positively associated with yields. This study uniquely employs precise soil quality measurements at the plot level with multiple plots per household so as to allow testing of both conventional explanations simultaneously. Our empirical results show that, in these data, only a small portion of the inverse productivity-size relationship is explained by market imperfections and none of it seems attributable to the omission of soil quality measurements.

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Bibliographic Info

Paper provided by Duke University, Department of Economics in its series Working Papers with number 10-22.

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Length: 38
Date of creation: 2010
Date of revision:
Handle: RePEc:duk:dukeec:10-22

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Keywords: Inverse Relationship; Productivity; Market Failures; Soil Characteristics; Sub-Saharan Africa; Madagascar;

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References

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  1. Juliano J. Assun��o & Luis H. B. Braido, 2007. "Testing Household-Specific Explanations for the Inverse Productivity Relationship," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(4), pages 980-990.
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  8. Assuncao, Juliano & Braido, Luis H.B., 2007. "AJAE Appendix: Testing Household-Specific Explanations for the Inverse Productivity Relationship," American Journal of Agricultural Economics Appendices, Agricultural and Applied Economics Association, vol. 89(4), November.
  9. Lamb, Russell L., 2003. "Inverse productivity: land quality, labor markets, and measurement error," Journal of Development Economics, Elsevier, vol. 71(1), pages 71-95, June.
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  16. Bhalla, Surjit S & Roy, Prannoy L, 1988. "Mis-specification in Farm Productivity Analysis: The Role of Land Quality," Oxford Economic Papers, Oxford University Press, vol. 40(1), pages 55-73, March.
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Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. The Inverse Farm Size–Productivity Relationship: “Proof” that Smallholders Can Feed the World?
    by Marc F. Bellemare in Marc F. Bellemare on 2012-10-22 09:00:05
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Cited by:
  1. Francesco Cinnirella & Erik Hornung, 2011. "Landownership Concentration and the Expansion of Education," Working Papers 0010, European Historical Economics Society (EHES).
  2. Bellemare, Marc F., 2010. "The Productivity Impacts of de Jure and de Facto Land Rights," MPRA Paper 23639, University Library of Munich, Germany.
  3. Bellemare, Marc F., 2010. "Agricultural Extension and Imperfect Supervision in Contract Farming: Evidence from Madagascar," MPRA Paper 23788, University Library of Munich, Germany.
  4. Tomasz Gerard Czekaj & Arne Henningsen, 2012. "Comparing Parametric and Nonparametric Regression Methods for Panel Data: the Optimal Size of Polish Crop Farms," IFRO Working Paper 2012/12, University of Copenhagen, Department of Food and Resource Economics.
  5. Pieralli, Simone, 2012. "Sources of measured agricultural yield difference," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124771, Agricultural and Applied Economics Association.
  6. Larson, Donald F. & Otsuka, Keijiro & Matsumoto, Tomoya & Kilic, Talip, 2012. "Should African rural development strategies depend on smallholder farms ? an exploration of the inverse productivity hypothesis," Policy Research Working Paper Series 6190, The World Bank.
  7. Verschelde, Marijn & D'Haese, Marijke F.C. & Vandamme, Ellen & Rayp, Glenn, 2011. "Challenging Small-scale Farming, A Non-parametric Analysis of the (Inverse) Relationship Between Farm Productivity and Farm Size in Burundi," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 115550, European Association of Agricultural Economists.
  8. Carletto, Calogero & Savastano, Sara & Zezza, Alberto, 2011. "Fact or artefact : the impact of measurement errors on the farm size - productivity relationship," Policy Research Working Paper Series 5908, The World Bank.

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