Heterogeneity, Measurement Error and Misallocation: Evidence from African Agriculture

Douglas Gollin () and Christopher Udry

No 25440, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Standard measures of productivity display enormous dispersion across farms in Africa. Crop yields and input intensities appear to vary greatly, seemingly in conflict with a model 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.

JEL-codes: O1 O11 O12 O13 Q1 (search for similar items in EconPapers)
Date: 2019-01
New Economics Papers: this item is included in nep-agr and nep-eff
Note: DEV
References: Add references at CitEc
Citations: View citations in EconPapers (16)

Published as Douglas Gollin & Christopher Udry, 2021. "Heterogeneity, Measurement Error, and Misallocation: Evidence from African Agriculture," Journal of Political Economy, vol 129(1), pages 1-80.

Downloads: (external link)
http://www.nber.org/papers/w25440.pdf (application/pdf)

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)
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:25440

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w25440

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 ().