Advanced Search
MyIDEAS: Login

The Size Distribution of Farms and International Productivity Differences

Contents:

Author Info

  • Tasso Adamopoulos
  • Diego Restuccia

Abstract

There are striking differences in the size distribution of farms between rich and poor countries. We study the determinants of farm-size across countries and their impact on agricultural and aggregate productivity by developing a quantitative model of agriculture and non-agriculture that features a non-degenerate size distribution of farms. We find that differences in measured aggregate factors such as capital, land, and economy-wide productivity account for 1/4 of the observed differences in farm size and productivity. Farm-level policies that misallocate resources from large-productive to small less-productive farms, are prevalent in poor countries, and have the potential to account for the remaining differences. We assess the quantitative importance of misallocation in two ways. First, we construct a summary measure of farm-size distortions across countries by exploiting within-country variation in crop-specific price distortions with crop farm size. This measure and aggregate factors jointly account for more than 1/2 of the differences in size and productivity. Second, we quantify the effects of two specific policies in developing countries: (a) a land reform that imposes a ceiling on farm size and (b) a progressive land tax. We find that each individual policy generates a reduction of 3 to 7% in size and productivity.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.economics.utoronto.ca/public/workingPapers/tecipa-480.pdf
File Function: Main Text
Download Restriction: no

Bibliographic Info

Paper provided by University of Toronto, Department of Economics in its series Working Papers with number tecipa-480.

as in new window
Length: Unknown pages
Date of creation: 08 Mar 2013
Date of revision:
Handle: RePEc:tor:tecipa:tecipa-480

Contact details of provider:
Postal: 150 St. George Street, Toronto, Ontario
Phone: (416) 978-5283

Related research

Keywords: Aggregate productivity; agriculture; farm-size distortions; misallocation.;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Ngai, L. Rachel & Pissarides, Christopher A., 2005. "Structural Change in a Multi-Sector Model of Growth," IZA Discussion Papers 1800, Institute for the Study of Labor (IZA).
  2. Daron Acemoglu & Veronica Guerrieri, 2008. "Capital Deepening and Nonbalanced Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 116(3), pages 467-498, 06.
  3. Francisco J. Buera & Joseph P. Kaboski, 2009. "The Rise of the Service Economy," NBER Working Papers 14822, National Bureau of Economic Research, Inc.
  4. Richard Rogerson & Diego Restuccia, 2004. "Policy Distortions and Aggregate Productivity with Heterogeneous Plants," 2004 Meeting Papers 69, Society for Economic Dynamics.
  5. Echevarria, Cristina, 1997. "Changes in Sectoral Composition Associated with Economic Growth," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 38(2), pages 431-52, May.
  6. Margarida Duarte & Diego Restuccia, 2010. "The Role of the Structural Transformation in Aggregate Productivity," The Quarterly Journal of Economics, MIT Press, vol. 125(1), pages 129-173, February.
  7. Xu Yi & Nezih Guner & Gustavo Ventura, 2005. "Macroeconomic Implications of Size Dependent Policies," 2005 Meeting Papers 530, Society for Economic Dynamics.
  8. Vollrath, Dietrich, 2009. "How important are dual economy effects for aggregate productivity?," Journal of Development Economics, Elsevier, vol. 88(2), pages 325-334, March.
  9. Bardhan, Pranab & Udry, Christopher, 1999. "Development Microeconomics," OUP Catalogue, Oxford University Press, number 9780198773719.
  10. Pan, Lei & Christiaensen, Luc, 2012. "Who is Vouching for the Input Voucher? Decentralized Targeting and Elite Capture in Tanzania," World Development, Elsevier, vol. 40(8), pages 1619-1633.
  11. Binswanger, Hans P., 1991. "Brazilian policies that encourage deforestation in the Amazon," World Development, Elsevier, vol. 19(7), pages 821-829, July.
  12. Chang-Tai Hsieh & Peter J. Klenow, 2007. "Misallocation and Manufacturing TFP in China and India," NBER Working Papers 13290, National Bureau of Economic Research, Inc.
  13. Diego Restuccia & Richard Rogerson, 2012. "Misallocation and Productivity," Working Papers tecipa-468, University of Toronto, Department of Economics.
  14. Easterly, William, 2000. "the middle class consensus and economic development," Policy Research Working Paper Series 2346, The World Bank.
  15. Todd Schoellman & Berthold Herrendorf, 2012. "Why is Measured Productivity so Low in Agriculture?," 2012 Meeting Papers 75, Society for Economic Dynamics.
  16. Michael Waugh & David Lagakos, 2009. "Specialization, Economic Development and Aggregate Productivity Differences," 2009 Meeting Papers 1248, Society for Economic Dynamics.
  17. Restuccia, Diego & Yang, Dennis Tao & Zhu, Xiaodong, 2008. "Agriculture and aggregate productivity: A quantitative cross-country analysis," Journal of Monetary Economics, Elsevier, vol. 55(2), pages 234-250, March.
  18. Douglas Gollin & Stephen Parente & Richard Rogerson, 2002. "The Role of Agriculture in Development," Department of Economics Working Papers 2002-09, Department of Economics, Williams College.
  19. John Luke Gallup & Jeffrey D. Sachs & Andrew Mellinger, 1999. "Geography and Economic Development," CID Working Papers 1, Center for International Development at Harvard University.
  20. Buera, Francisco J. & Kaboski, Joseph P., 2012. "Scale and the origins of structural change," Journal of Economic Theory, Elsevier, vol. 147(2), pages 684-712.
  21. Adriano, Lourdes S., 1991. "A General Assessment of the Comprehensive Agrarian Reform Program," Working Papers WP 1991-13, Philippine Institute for Development Studies.
  22. David Lagakos & Michael E. Waugh, 2013. "Selection, Agriculture, and Cross-Country Productivity Differences," American Economic Review, American Economic Association, vol. 103(2), pages 948-80, April.
  23. Cornia, Giovanni Andrea, 1985. "Farm size, land yields and the agricultural production function: An analysis for fifteen developing countries," World Development, Elsevier, vol. 13(4), pages 513-534, April.
  24. Kawagoe, Toshihiko, 1999. "Agricultural land reform in postwar Japan : experiences and issues," Policy Research Working Paper Series 2111, The World Bank.
  25. Tasso Adamopoulos, 2008. "Land Inequality and the Transition to Modern Growth," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(2), pages 257-282, April.
  26. Areendam Chanda & Carl-Johan Dalgaard, 2003. "Dual Economies and International Total Factor Productivity Differences," Macroeconomics 0305002, EconWPA.
  27. Oded Galor & Omar Moav & Dietrich Vollrath, 2006. "Inequality in Land Ownership, the Emergence of Human Capital Promoting Institutions, and the Great Divergence," DEGIT Conference Papers c011_001, DEGIT, Dynamics, Economic Growth, and International Trade.
  28. Binswanger, Hans P. & Deininger, Klaus & Feder, Gershon, 1993. "Power, distortions, revolt, and reform in agricultural land relations," Policy Research Working Paper Series 1164, The World Bank.
  29. Wiebe, Keith D. & Soule, Meredith J. & Narrod, Clare A. & Breneman, Vincent E., 2000. "Resource Quality And Agricultural Productivity: A Multi-Country Comparison," 2000 Annual meeting, July 30-August 2, Tampa, FL 21723, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  30. David Lagakos, 2009. "Superstores or mom and pops? Technolgy adoption and productivity differences in retail trade," Staff Report 428, Federal Reserve Bank of Minneapolis.
  31. Akos Valentinyi & Berthold Herrendorf, 2008. "Measuring Factor Income Shares at the Sector Level," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(4), pages 820-835, October.
  32. Douglas Gollin, 2012. "The Agricultural Productivity Gap in Developing Countries," 2012 Meeting Papers 510, Society for Economic Dynamics.
  33. Markus Goldstein & Christopher Udry, 2008. "The Profits of Power: Land Rights and Agricultural Investment in Ghana," Journal of Political Economy, University of Chicago Press, vol. 116(6), pages 981-1022, December.
  34. Tasso Adamopoulos, 2006. "Transportation Costs, Agricultural Productivity and Cross-Country Income Differences," 2006 Meeting Papers 663, Society for Economic Dynamics.
  35. Michael Maio & James Schmitz & Arilton Teixeira & Benjamin Bridgman, 2011. "Why Has Puerto Rico Performed So Poorly? Lessons from its Sugar Manufacturing Industry," 2011 Meeting Papers 1048, Society for Economic Dynamics.
  36. Dale W. Jorgenson, 1995. "Productivity, Volume 1: Postwar US Economic Growth," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262100495, December.
  37. Gallup, J.L. & Sachs, J.D. & Mullinger, A., 1999. "Geography and Economic Development," Papers 1, Chicago - Graduate School of Business.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Trevor Tombe, 2012. "The Missing Food Problem," Working Papers tt0060, Wilfrid Laurier University, Department of Economics, revised 2012.
  2. Diego Restuccia & Richard Rogerson, 2012. "Misallocation and Productivity," Working Papers tecipa-468, University of Toronto, Department of Economics.
  3. Wei Wang & Junmin Liao, 2013. "Financial Frictions and Agricultural Productivity Differences," 2013 Meeting Papers 1314, Society for Economic Dynamics.
  4. Trevor Tombe, 2010. "The Missing Food Problem: How Low Agricultural Imports Contribute to International Income and Productivity Differences," Working Papers tecipa-416, University of Toronto, Department of Economics.
  5. Loren Brandt & Trevor Tombe & Xiaodong Zhu, 2012. "Factor Market Distortions across Time, Space and Sectors in China," Working Papers 262012, Hong Kong Institute for Monetary Research.
  6. Klaus Deininger & Denys Nizalov & Sudhir K Singh, 2013. "Are mega-farms the future of global agriculture? Exploring the farm size-productivity relationship for large commercial farms in Ukraine," Discussion Papers 49, Kyiv School of Economics.
  7. Cai, Wenbiao, 2010. "Skill Investment, Farm Size Distribution and Agricultural Productivity," MPRA Paper 26439, University Library of Munich, Germany.
  8. Deininger, Klaus & Nizalov, Denys & Singh, Sudhir K, 2013. "Are mega-farms the future of global agriculture ? exploring the farm size-productivity relationship," Policy Research Working Paper Series 6544, The World Bank.
  9. Loren Brandt & Trevor Tombe & Xiadong Zhu, 2012. "Online Appendix to "Factor Market Distortions Across Time, Space, and Sectors in China"," Technical Appendices 11-95, Review of Economic Dynamics.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:tor:tecipa:tecipa-480. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (RePEc Maintainer).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.