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Testing Household-Specific Explanations for the Inverse Productivity Relationship

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  • Juliano J. Assunção
  • Luis H. B. Braido

Abstract

The inverse relationship between land productivity and farm size is an old and puzzling empirical regularity. Most explanations for this relationship rely on market imperfections that jointly determine the farm size and the household's shadow price of some productive inputs. We use plot-level data from the ICRISAT/VLS to assess whether these household-specific theories can explain the puzzle. The data exhibit plots of different sizes being simultaneously cropped by the same household. The inverse relationship is shown to hold true with the same magnitude across the plots of each household, thus cross-household heterogeneity does not suffice to explain the puzzle. Copyright 2007, Oxford University Press.

Suggested Citation

  • Juliano J. Assunção & 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.
    • Handle: RePEc:oup:ajagec:v:89:y:2007:i:4:p:980-990
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    File URL: http://hdl.handle.net/10.1111/j.1467-8276.2007.01032.x
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