Economies of Density versus Natural Advantage: Crop Choice on the Back Forty

Thomas Holmes () and Sanghoon Lee

No 14704, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We estimate the factors determining specialization of crop choice at the level of individual fields, distinguishing between the role of natural advantage (soil characteristics) and economies of density (scale economies achieved when farmers plant neighboring fields with the same crop). Using rich geographic data from North Dakota, including new data on crop choice collected by satellite, we estimate the analog of a social interactions econometric model for the planting decisions on neighboring fields. We find that planting decisions on a field are heavily dependent on the soil characteristics of the neighboring fields. Through this relationship, we back out the structural parameters of economies of density. Setting an Ellison-Glaeser dartboard level of specialization as a benchmark, we find that of the actual level of specialization achieved beyond this benchmark, approximately two-thirds can be attributed to natural advantage and one-third to density economies.

JEL-codes: Q10 R12 R14 (search for similar items in EconPapers)
Date: 2009-02
Note: PR
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Published as Thomas J. Holmes & Sanghoon Lee, 2012. "Economies of Density versus Natural Advantage: Crop Choice on the Back Forty," The Review of Economics and Statistics, MIT Press, vol. 94(1), pages 1-19, 07.

Downloads: (external link)
http://www.nber.org/papers/w14704.pdf (application/pdf)

Related works:
Journal Article: Economies of Density versus Natural Advantage: Crop Choice on the Back Forty (2012)
Working Paper: Economies of density versus natural advantage: crop choice on the back forty (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:14704

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w14704

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().