American Economic Journal: Macroeconomics
no. 2, April 2023
Using detailed household-level data from Malawi on physical quantities of agricultural outputs and inputs, we measure farm total factor productivity (TFP), controlling for land quality, rain, and 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 between 1.7- and 2.8-fold. We provide suggestive evidence connecting misallocation with the extent of land markets and illustrate how an efficient allocation via rental markets can substantially reduce agricultural income inequality and poverty.
Chen, Chaoran, Diego Restuccia, and Raül Santaeulàlia-Llopis.
"Land Misallocation and Productivity."
American Economic Journal: Macroeconomics,
Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
Personal Income, Wealth, and Their Distributions
Measurement and Analysis of Poverty
Economic Development: Agriculture; Natural Resources; Energy; Environment; Other Primary Products
Economic Development: Human Resources; Human Development; Income Distribution; Migration
Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment