Land Misallocation and Productivity

Chaoran Chen, Diego Restuccia and Raul Santaeulalia-Llopis ()

Working Papers from University of Toronto, Department of Economics

Abstract: Using detailed household-level data from Malawi on physical quantities of outputs and inputs in agricultural production, we measure total factor productivity (TFP) for farms controlling for land quality, rain, and other transitory shocks. We find that operated land size and capital are essentially unrelated to farm TFP implying substantial factor misallocation. The agricultural output gain from a reallocation of factors to their efficient use among existing farmers is a factor of 2.8-fold nationwide and 1.8-fold within enumeration areas, the narrowest geographical category in our data. Constructing a panel to estimate household-farm productivity that controls for transitory variation such as potential measurement error, the agricultural output gain is still quite substantial, between 1.7 to 2.0-fold, while the pattern of misallocation of near zero correlation of inputs and productivity remains essentially the same. We also provide suggestive evidence of the connection between misallocation and land markets and illustrate how an efficient allocation can substantially reduce agricultural income inequality and poverty.

Keywords: misallocation; land; productivity; agriculture; Malawi; micro data. (search for similar items in EconPapers)
JEL-codes: O1 O4 (search for similar items in EconPapers)
Pages: Unknown pages
Date: 2022-03-04
New Economics Papers: this item is included in nep-agr, nep-ban, nep-dev and nep-eff
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.economics.utoronto.ca/public/workingPapers/tecipa-720.pdf Main Text (application/pdf)

Related works:
Journal Article: Land Misallocation and Productivity (2023)
Working Paper: Land Misallocation and Productivity (2017)
Working Paper: Land Misallocation and Productivity (2017)
Working Paper: Land Misallocation and Productivity (2017)
Working Paper: Land Misallocation and Productivity (2015)
Working Paper: Land Misallocation and Productivity (2015)
Working Paper: Land Misallocation and Productivity (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:tor:tecipa:tecipa-720

Access Statistics for this paper

More papers in Working Papers from University of Toronto, Department of Economics 150 St. George Street, Toronto, Ontario.
Bibliographic data for series maintained by RePEc Maintainer ().