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Isolation and agricultural productivity

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  • David Stifel
  • Bart Minten

Abstract

This article examines the mechanisms that transmit isolation into productivity. In particular, we study the effect of isolation and transport infrastructure on welfare and agricultural productivity in the case of Madagascar. Madagascar is a good case study given the bad shape of its infrastructure and therefore the significant variation in isolation. Based on comprehensive household survey data combined with a census of communes, we discover a strong poverty-isolation relationship. Further we find the inverse relationship between agricultural productivity and isolation to be surprisingly strong. We isolate the following reasons why productivity might decline with isolation: (i) transportation-induced transaction costs, (ii) the inverse relationship between plot size and productivity, (iii) increasing price variability and extensification onto less fertile land, and (iv) insecurity. Copyright (c) 2008 International Association of Agricultural Economists.

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  • David Stifel & Bart Minten, 2008. "Isolation and agricultural productivity," Agricultural Economics, International Association of Agricultural Economists, vol. 39(1), pages 1-15, July.
  • Handle: RePEc:bla:agecon:v:39:y:2008:i:1:p:1-15
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    1. Philippe De Vreyer & Javier Herrera & Sandrine Mesplé-Somps, 2002. "Consumption growth and spatial poverty traps: an analysis of the effects of social services and community infrastructures on living standards in rural Peru," Working Papers DT/2002/17, DIAL (Développement, Institutions et Mondialisation), revised Oct 2003.
    2. Masahisa Fujita & Paul Krugman & Anthony J. Venables, 2001. "The Spatial Economy: Cities, Regions, and International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262561476, January.
    3. Ahmed, Raisuddin & Hossain, Mahabub, 1990. "Developmental impact of rural infrastructure in Bangladesh:," Research reports 83, International Food Policy Research Institute (IFPRI).
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