 Subsistence Farming and Factor Misallocation: Evidence from Ugandan AgricultureThe World Bank Economic Review, 2023, vol. 37, issue 4, 570-598 Abstract: This paper presents a model where misallocation in the agricultural factors of production is caused by transportation costs to and from local markets, which result in an inefficiently large share of inputs operated by less productive subsistence farmers. The model derives some testable predictions which are verified in the empirical analysis, based on a representative census of Ugandan farms. Specifically, subsistence farmers operate inefficiently high shares of land and capital and the efficiency losses are more severe in areas where subsistence farming is more widespread, due to lower connectivity with local markets. Conversely, there is no relationship between the level of misallocation and credit access and/or land-market activity. These findings suggest that transportation costs play a key role in determining the efficiency of agricultural input distribution and that land-market liberalization is a necessary but not sufficient condition to tackle misallocation. Keywords: misallocation; productivity; agriculture; Uganda (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:oup:wbecrv:v:37:y:2023:i:4:p:570-598. Ordering information: This journal article can be ordered from Access Statistics for this article The World Bank Economic Review is currently edited by Eric Edmonds and Nina Pavcnik More articles in The World Bank Economic Review from World Bank Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK. Contact information at EDIRC. |
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