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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
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    JEL classification:

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

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