Misallocation in Indian Agriculture

Marijn Bolhuis, Swapnika Rachapalli and Diego Restuccia

American Economic Journal: Macroeconomics, 2026, vol. 18, issue 2, 378-408

Abstract: We exploit substantial variation in land-market institutions across Indian states and detailed household-level panel data to assess the effect of land-market distortions on agricultural productivity. We develop a model of heterogeneous farms and distorted land markets, featuring (i) state-level barriers to land-market participation and (ii) idiosyncratic (farm-level) distortions to farm size. We separately identify and estimate the two sources of land-market distortions in each state. We find substantial differences across states in rental barriers with large negative effects on agricultural productivity. Distortions associated with land-market participation contribute substantially to agricultural productivity differences across Indian states.

JEL-codes: D24 O13 O18 Q12 Q15 Q24 (search for similar items in EconPapers)
Date: 2026
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Misallocation in Indian Agriculture (2025)
Working Paper: Misallocation in Indian Agriculture (2024)
Working Paper: Misallocation in Indian Agriculture (2021)
Working Paper: Misallocation in Indian Agriculture (2021)
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DOI: 10.1257/mac.20210358

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