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Land Fragmentation, Market Integration and Farm Efficiency: Empirical Evidence from Kosovo

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  • Sauer, Johannes
  • Davidova, Sophia
  • Gorton, Matthew

Abstract

This paper investigates the effect of land fragmentation on farm efficiency in Kosovo utilising agricultural household survey data. To recognise heterogeneity among agricultural production systems in Kosovo, we estimate the technology separately for different groups or “classes” of farms, identified using latent class modelling. This approach separates the data into multiple technological “classes” according to estimated probabilities of class membership based on multiple specified characteristics, relating in this case to land fragmentation and market integration. The latent class frontier method is linked to the estimation of a multi-output multi-input production function, namely a directional output distance function, and to the estimation of Morishima elasticities of substitution, based on shadow price changes indicating allocative efficiency changes. The analytical results confirm that the usual approach of using one homogenous function to estimate fragmentation effects is misleading and can lead to inappropriate policy recommendations. Three distinct classes of farm households are identified, which show different levels of efficiency and the proxies for land fragmentation and market integration show different signs over these classes.

Suggested Citation

  • Sauer, Johannes & Davidova, Sophia & Gorton, Matthew, 2012. "Land Fragmentation, Market Integration and Farm Efficiency: Empirical Evidence from Kosovo," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 123236, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea12:123236
    DOI: 10.22004/ag.econ.123236
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    2. Apata Temidayo Gabriel, 2019. "Public spending mechanisms and gross domestic product (GDP) growth in the agricultural sector (1970–2016): Lessons for Nigeria from agricultural policy progressions in China," Bulletin of Geography. Socio-economic Series, Sciendo, vol. 44(44), pages 57-72, June.

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    More about this item

    Keywords

    Agricultural and Food Policy; Production Economics; Productivity Analysis;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

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