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Productivity, transport costs and subsistence agriculture

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  • Gollin, Douglas
  • Rogerson, Richard

Abstract

A defining feature of many poor economies is the large fraction of workers engaged in subsistence agriculture. We develop a multi-sector multi-region model of a poor economy in which it is costly to transport goods across regions in order to study this outcome. A key finding is that higher transport costs drive up the size of the agricultural workforce and the fraction in subsistence. In a calibrated version of our model we show that the effect of transport productivity is quantitatively important in terms of both allocations and welfare.

Suggested Citation

  • Gollin, Douglas & Rogerson, Richard, 2014. "Productivity, transport costs and subsistence agriculture," Journal of Development Economics, Elsevier, vol. 107(C), pages 38-48.
    • Handle: RePEc:eee:deveco:v:107:y:2014:i:c:p:38-48
    DOI: 10.1016/j.jdeveco.2013.10.007
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    References listed on IDEAS

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