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Determinants of Soil Capital


  • Ekbom, Anders

    () (Department of Economics, School of Business, Economics and Law, Göteborg University)


This paper combines knowledge from soil science and economics to estimate economic determinants of soil capital. Explaining soil capital facilitates a better understanding of constraints and opportunities for increased agricultural production and reduced land degradation. The study builds on an unusually rich data set that combines data on soil capital (represented by chemical and physical properties) and economic data on household characteristics, labour supply, crop allocation and conservation investments. The study yields both methodological and policy-relevant results. On methodology, the analysis shows that soil capital is heterogeneous with soil properties widely distributed across the farms. Likewise, farmers’ investment decisions and soil management vary widely across farms. Hence simplifications of soil capital, which are common in the economics literature, may have limited validity. On the other hand, soil science research limited to soils’ biological, physical and chemical characteristics fail to recognize that soil is capital owned and managed by farmers. They thus run the risk of omitting important socio-economic determinants of soil capital. They also exclude the possibility to explain some of the dynamics that are determined by its stock character. On policy, the study shows that farmers’ soil conservation investments, allocation of labour, manure and fertilizer input, and crop choice indeed do determine variation in farmers’ soil capital. Particularly strong positive effects on key soil nutrients (N,P,K) are observed for certain conservation technologies. Extension advice shows unexpectedly no significant effects on soil capital. The wide distribution of soil properties across farms reinforces the need to (i) tailor technical extension advice to the specific circumstances in each farm, and (ii) enhance the integration of farmers’ knowledge and experiences, expert judgment and scientific soil analysis at the farm level.

Suggested Citation

  • Ekbom, Anders, 2009. "Determinants of Soil Capital," Working Papers in Economics 339, University of Gothenburg, Department of Economics.
  • Handle: RePEc:hhs:gunwpe:0339

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    References listed on IDEAS

    1. Peter Berck & Gloria Helfand, 1990. "Reconciling the von Liebig and Differentiable Crop Production Functions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(4), pages 985-996.
    2. Simmons, Peter & Weiserbs, Daniel, 1979. "Translog Flexible Functional Forms and Associated Demand Systems," American Economic Review, American Economic Association, vol. 69(5), pages 892-901, December.
    3. Shiferaw, Bekele & Holden, Stein, 1999. "Soil Erosion and Smallholders' Conservation Decisions in the Highlands of Ethiopia," World Development, Elsevier, vol. 27(4), pages 739-752, April.
    4. Shiferaw, Bekele & Holden, Stein T., 2001. "Farm-level benefits to investments for mitigating land degradation: empirical evidence from Ethiopia," Environment and Development Economics, Cambridge University Press, vol. 6(03), pages 335-358, July.
    5. LaFrance, Jeffrey T., 1992. "Do Increased Commodity Prices Lead To More Or Less Soil Degradation?," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 36(01), April.
    6. Peter Berck & Jacqueline Geoghegan & Stephen Stohs, 2000. "A Strong Test of the von Liebig Hypothesis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(4), pages 948-955.
    7. Kenneth E. McConnell, 1983. "An Economic Model of Soil Conservation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 65(1), pages 83-89.
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    More about this item


    soil fertility; soil productivity; resource management;

    JEL classification:

    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General

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