IDEAS home Printed from https://ideas.repec.org/p/wop/wiaesp/369.html
   My bibliography  Save this paper

On The Price Risk And The Inverse Farm Size-Productivity Relationship

Author

Listed:
  • Christopher BARRETT

    ()

Abstract

The oft-observed inverse relationship between farm size and productivity is generally explained by labor market imperfections. Although other explanations exist (e.g., size-sensitive cropping patterns and variable soil quality), the literature ignores uncertainty as an explanation. Using a simple two-period model of an agricultural household that both produces and consumes under price uncertainty at the time labor allocation decisions are made, this paper demonstrates analytically that an inverse relationship may exist, even absent any of the more common explanations. A simple data exercise suggests the plausibility of temporal price risk as an explanation for this phenomenon.

Suggested Citation

  • Christopher BARRETT, 1993. "On The Price Risk And The Inverse Farm Size-Productivity Relationship," Staff Papers 369, University of Wisconsin Madison, AAE.
  • Handle: RePEc:wop:wiaesp:369
    as

    Download full text from publisher

    File URL: http://agecon.lib.umn.edu/wis/stpap369.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Michael R. Carter & Keith D. Wiebe, 1990. "Access to Capital and Its Impact on Agrarian Structure and Productivity in Kenya," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(5), pages 1146-1150.
    2. Block, M K & Heineke, J M, 1973. "The Allocation of Effort under Uncertainty: The Case of Risk-averse Behavior," Journal of Political Economy, University of Chicago Press, vol. 81(2), pages 376-385, Part I, M.
    3. Hans P. Binswanger, 1980. "Attitudes Toward Risk: Experimental Measurement in Rural India," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 62(3), pages 395-407.
    4. Pitt, Mark M, 1983. "Food Preferences and Nutrition in Rural Bangladesh," The Review of Economics and Statistics, MIT Press, vol. 65(1), pages 105-114, February.
    5. Greer, Joel & Thorbecke, Erik, 1986. "Food Poverty Profile Applied to Kenyan Smallholders," Economic Development and Cultural Change, University of Chicago Press, vol. 35(1), pages 115-141, October.
    6. Timmer, C Peter, 1981. "Is There "Curvature" in the Slutsky Matrix?," The Review of Economics and Statistics, MIT Press, vol. 63(3), pages 395-402, August.
    7. Epstein, L, 1975. "A Disaggregate Analysis of Consumer Choice under Uncertainty," Econometrica, Econometric Society, vol. 43(5-6), pages 877-892, Sept.-Nov.
    8. Newbery, David M, 1989. "The Theory of Food Price Stabilisation," Economic Journal, Royal Economic Society, vol. 99(398), pages 1065-1082, December.
    9. Turnovsky, Stephen J & Shalit, Haim & Schmitz, Andrew, 1980. "Consumer's Surplus, Price Instability, and Consumer Welfare," Econometrica, Econometric Society, vol. 48(1), pages 135-152, January.
    10. Carter, Michael R, 1984. "Identification of the Inverse Relationship between Farm Size and Productivity: An Empirical Analysis of Peasant Agricultural Production," Oxford Economic Papers, Oxford University Press, vol. 36(1), pages 131-145, March.
    11. Cornia, Giovanni Andrea, 1985. "Farm size, land yields and the agricultural production function: An analysis for fifteen developing countries," World Development, Elsevier, vol. 13(4), pages 513-534, April.
    12. Bhalla, Surjit S., 1988. "Does land quality matter? : Theory and measurement," Journal of Development Economics, Elsevier, vol. 29(1), pages 45-62, July.
    13. Per Pinstrup-Andersen & Elizabeth Caicedo, 1978. "The Potential Impact of Changes in Income Distribution on Food Demand and Human Nutrition," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 60(3), pages 402-415.
    14. Benjamin, Dwayne, 1995. "Can unobserved land quality explain the inverse productivity relationship?," Journal of Development Economics, Elsevier, vol. 46(1), pages 51-84, February.
    15. Michael T. Weber & John M. Staatz & Eric W. Crawford & Richard H. Bernsten & John S. Holtzman, 1988. "Informing Food Security Decisions in Africa: Empirical Analysis and Policy Dialogue," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 70(5), pages 1044-1052.
    16. Marcel Fafchamps, 1992. "Cash Crop Production, Food Price Volatility, and Rural Market Integration in the Third World," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 74(1), pages 90-99.
    17. Sandmo, Agnar, 1971. "On the Theory of the Competitive Firm under Price Uncertainty," American Economic Review, American Economic Association, vol. 61(1), pages 65-73, March.
    18. Waterfield, Charles, 1985. "Disaggregating food consumption parameters : Designing targeted nutritional interventions," Food Policy, Elsevier, vol. 10(4), pages 337-351, November.
    19. John M. Antle, 1987. "Econometric Estimation of Producers' Risk Attitudes," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 69(3), pages 509-522.
    20. Israel Finkelshtain & James A. Chalfant, 1991. "Marketed Surplus under Risk: Do Peasants Agree with Sandmo?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 73(3), pages 557-567.
    21. Stiglitz, Joseph E., 1986. "The new development economics," World Development, Elsevier, vol. 14(2), pages 257-265, February.
    22. Feder, Gershon, 1985. "The relation between farm size and farm productivity : The role of family labor, supervision and credit constraints," Journal of Development Economics, Elsevier, vol. 18(2-3), pages 297-313, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Temel, T. & Lucas, A., 2005. "Deepening the Measuring of Technical Inefficiency in Private Farming in Georgia: Locally Parametric Regression," International Journal of Applied Econometrics and Quantitative Studies, Euro-American Association of Economic Development, vol. 2(1), pages 115-138.
    2. repec:eee:jpolmo:v:39:y:2017:i:5:p:741-761 is not listed on IDEAS
    3. Tanguy Bernard & Alemayehu Seyoum Taffesse & Eleni Gabre-Madhin, 2008. "Impact of cooperatives on smallholders' commercialization behavior: evidence from Ethiopia," Agricultural Economics, International Association of Agricultural Economists, vol. 39(2), pages 147-161, September.
    4. Temel, Tugrul, 2011. "New facts for old debates: Farm size and productivity in US agriculture," MPRA Paper 31920, University Library of Munich, Germany.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wop:wiaesp:369. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Krichel). General contact details of provider: http://edirc.repec.org/data/dauwius.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.