Heterogeneity, Measurement Error, and Misallocation: Evidence from African Agriculture

Douglas Gollin () and Christopher Udry

No 2019-01, CSAE Working Paper Series from Centre for the Study of African Economies, University of Oxford

Abstract: Standard measures of prouctivity display enormous dispersion across farms in Africa. Crop yields and input intensities appear to vary greatly, seemingly in conflict with a cmodel of efficient allocation across farms. In this paper, we present a theoretical framework for distinguishing between measurement error, unobserved heterogeneity, and potential misallocation. Using rich panel data from farms in Tanzania and uganda, we estimate our model using a flexible specification in which we allow for several kinds of measurement error and heterogeneity. We find that measurement, error and heterogeneity together account for a large fraction - as much as ninety percent - of the dispersion in measured productivity. In contrast to some previous estimates, we suggest that the potential for efficiency gains through reallocation of land across farms and farmers may be relatively modest.

Date: 2019
New Economics Papers: this item is included in nep-agr, nep-dev and nep-eff
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Citations: View citations in EconPapers (19)

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Related works:
Journal Article: Heterogeneity, Measurement Error, and Misallocation: Evidence from African Agriculture (2021)
Working Paper: Heterogeneity, Measurement Error, and Misallocation: Evidence from African Agriculture (2019)
Working Paper: Heterogeneity, Measurement Error and Misallocation: Evidence from African Agriculture (2019)
Working Paper: Heterogeneity, Measurement Error, and Misallocation: Evidence from African Agriculture (2018)
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