Farm Size Distribution, Weather Shocks, and Agricultural Productivity

Julián Arteaga (), Nicolás de Roux, Margarita Gafaro, Ana Ibáñez and Heitor Pellegrina ()
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Julián Arteaga: World Bank
Heitor Pellegrina: University of Notre Dame

No 21308, Documentos CEDE from Universidad de los Andes, Facultad de Economía, CEDE

Abstract: This paper studies the dynamics of farm size distribution, how they are influenced by weather shocks, and the implications for aggregate productivity. Using data from several developing countries, we first document new empirical facts about households’ landholding choices and how weather shocks influence these decisions. Building on a rich longitudinal dataset for Colombia on farm sizes, land transactions, and households’ consumption and investment decisions, we then show that weather shocks increase the frequency of land sales and reduce farm sizes within municipalities, especially among smaller farms. To rationalize these facts, we develop a dynamic, heterogeneous household model in which uninsured farmers make landholding and occupational choices. Our calibrated model shows that uninsured risk substantially curbs aggregate agricultural productivity, and that the effects of temporary weather shocks on farm size and agricultural output are highly persistent, taking more than a decade to fade out.

Keywords: Farm Size; Weather Shocks; Aggregate Shocks; Heterogeneous Agent Model (search for similar items in EconPapers)
JEL-codes: D52 O13 Q12 Q15 Q54 (search for similar items in EconPapers)
Pages: 71 pages
Date: 2025-01-27
New Economics Papers: this item is included in nep-agr, nep-dev, nep-dge and nep-env
References: View references in EconPapers View complete reference list from CitEc
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Related works:
Working Paper: Farm Size Distribution, Weather Shocks, and Agricultural Productivity (2025)
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Persistent link: https://EconPapers.repec.org/RePEc:col:000089:021308

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