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Why is Measured Productivity so Low in Agriculture?

Author

Listed:
  • Todd Schoellman

    (Arizona State University)

  • Berthold Herrendorf

    (Arizona State University)

Abstract

It is well known that poor countries are much less productive in agriculture than in the rest of the economy, and that it is hard to account for these productivity gaps. In this paper, we study US states during 1980–2009. We find that there are large productivity gaps between agriculture and non–agriculture. These productivity gaps are not at all accounted for by gaps in real wages per efficiency unit, which are similar in the two sectors. Instead, they are accounted for by two key factors: human capital is much higher in non–agriculture; and value added is seriously mis–measured in agriculture.

Suggested Citation

  • Todd Schoellman & Berthold Herrendorf, 2012. "Why is Measured Productivity so Low in Agriculture?," 2012 Meeting Papers 75, Society for Economic Dynamics.
  • Handle: RePEc:red:sed012:75
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    References listed on IDEAS

    as
    1. Tasso Adamopoulos & Diego Restuccia, 2014. "The Size Distribution of Farms and International Productivity Differences," American Economic Review, American Economic Association, vol. 104(6), pages 1667-1697, June.
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    4. Restuccia, Diego & Yang, Dennis Tao & Zhu, Xiaodong, 2008. "Agriculture and aggregate productivity: A quantitative cross-country analysis," Journal of Monetary Economics, Elsevier, vol. 55(2), pages 234-250, March.
    5. Berthold Herrendorf & Arilton Teixeira, 2011. "Barriers To Entry And Development," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 52(2), pages 573-602, May.
    6. Douglas Gollin, 2002. "Getting Income Shares Right," Journal of Political Economy, University of Chicago Press, vol. 110(2), pages 458-474, April.
    7. Fulginiti, Lilyan E & Perrin, Richard K, 1993. "Prices and Productivity in Agriculture," The Review of Economics and Statistics, MIT Press, vol. 75(3), pages 471-482, August.
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    12. Mundlack, Yair & Larson, Donald F. & Butzer, Rita, 2002. "Determinants of agricultural growth in Indonesia, the Philippines, and Thailand," Policy Research Working Paper Series 2803, The World Bank.
    13. Hayami, Yujiro & Ruttan, Vernon W, 1970. "Agricultural Productivity Differences Among Countries," American Economic Review, American Economic Association, vol. 60(5), pages 895-911, December.
    14. Fishelson, Gideon, 1974. "Relative Shares of Labor and Capital in Agriculture: A Subarid Area Israel, 1952-1969," The Review of Economics and Statistics, MIT Press, vol. 56(3), pages 348-352, August.
    15. Berthold Herrendorf & Todd Schoellman, 2017. "Wages, Human Capital, and Structural Transformation," CESifo Working Paper Series 6426, CESifo.
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    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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