Assessing Misallocation in Agriculture: Plots versus Farms

Fernando Aragon, Diego Restuccia and Juan Pablo Rud

No 29749, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We examine empirically whether the level of data aggregation affects the assessment of misallocation in agriculture. Using data from Ugandan farmers, we document a substantial discrepancy between misallocation measures calculated at the plot and at the farm levels. Estimates of misallocation at the plot level are much higher than those estimated with the same data but aggregated at the farm level. Even after accounting for measurement error and unobserved heterogeneity, estimates of misallocation at the plot level are extremely high, with nationwide agricultural productivity gains of 562%. Furthermore, we find suggestive evidence that granular data may be more susceptible to measurement error in survey data and that data aggregation can attenuate the relative magnitude of measurement error in misallocation measures. Our findings suggest caution in generalizing insights on measurement error and misallocation from plot-level analysis to those at the farm level.

JEL-codes: O11 O13 O4 O55 Q1 (search for similar items in EconPapers)
Date: 2022-02
New Economics Papers: this item is included in nep-agr, nep-ban and nep-eff
Note: DEV EFG PR
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Citations: View citations in EconPapers (4)

Published as Fernando M. Aragón & Diego Restuccia & Juan Pablo Rud, 2024. "Assessing misallocation in agriculture: Plots versus farms," Food Policy, vol 128.

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Journal Article: Assessing misallocation in agriculture: Plots versus farms (2024)
Working Paper: Assessing misallocation in agriculture: plots versus farms (2024)
Working Paper: Assessing Misallocation in Agriculture: Plots versus Farms (2022)
Working Paper: Assessing misallocation in agriculture: plots versus farms (2022)
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