Productivity, transport costs and subsistence agriculture

Douglas Gollin () and Richard Rogerson

Journal of Development Economics, 2014, vol. 107, issue C, 38-48

Abstract: A defining feature of many poor economies is the large fraction of workers engaged in subsistence agriculture. We develop a multi-sector multi-region model of a poor economy in which it is costly to transport goods across regions in order to study this outcome. A key finding is that higher transport costs drive up the size of the agricultural workforce and the fraction in subsistence. In a calibrated version of our model we show that the effect of transport productivity is quantitatively important in terms of both allocations and welfare.

Keywords: Economic development; Structural transformation; Transport costs; Subsistence agriculture; Agricultural development; Two-sector model (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (109)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:deveco:v:107:y:2014:i:c:p:38-48

DOI: 10.1016/j.jdeveco.2013.10.007

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