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Land Misallocation and Productivity

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  • Diego Restuccia
  • Raul Santaeulalia-Llopis

Abstract

Using detailed household-farm level data from Malawi, we measure real farm total factor productivity (TFP) controlling for a wide array of factor inputs, land quality, and transitory shocks. The distribution of farm TFP has substantial dispersion but factor inputs are roughly evenly spread among farmers, implying a strong negative effect on agricultural productivity. A reallocation of factors to their efficient use among existing farmers would increase agricultural productivity by a factor of 3.6-fold. The gains from reallocation are 2.6 times larger for farms with no marketed land than for farms that operate marketed land.

Suggested Citation

  • Diego Restuccia & Raul Santaeulalia-Llopis, 2015. "Land Misallocation and Productivity," Working Papers tecipa-541, University of Toronto, Department of Economics.
  • Handle: RePEc:tor:tecipa:tecipa-541
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    References listed on IDEAS

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    More about this item

    Keywords

    misallocation; land; productivity; agriculture; Malawi; micro data.;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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