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Land Misallocation and Productivity

Diego Restuccia () and Raul Santaeulalia-Llopis

No 954, Working Papers from Barcelona Graduate School of Economics

Abstract: Using detailed household-level data from Malawi on physical quantities of outputs and inputs in agricultural production, we measure total factor productivity (TFP) for farms controlling for land quality, rain, and other transitory shocks. We find that operated land size and capital are essentially unrelated to farm TFP implying substantial factor misallocation. The aggregate agricultural output gain from a reallocation of factors to their efficient use among existing farmers is a factor of 3.6-fold. We directly link factor misallocation to severely restricted land markets as the vast majority of land is allocated by village chiefs and not marketed. In particular, the output gain from reallocation are 2.6 times larger for farms with no marketed land than for farms that only operate marketed land.

Keywords: misallocation; land; productivity; agriculture; Malawi; micro data (search for similar items in EconPapers)
JEL-codes: O1 O4 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr and nep-eff
Date: 2017-02
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Related works:
Working Paper: Land Misallocation and Productivity (2017) Downloads
Working Paper: Land Misallocation and Productivity (2017) Downloads
Working Paper: Land Misallocation and Productivity (2015) Downloads
Working Paper: Land Misallocation and Productivity (2015) Downloads
Working Paper: Land Misallocation and Productivity (2014)
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