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Land Reform and Productivity: A Quantitative Analysis with Micro Data

Tasso Adamopoulos () and Diego Restuccia ()

No 25780, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We assess the effects of a major land policy change on farm size and agricultural productivity using a quantitative model and micro-level data. We study the 1988 land reform in the Philippines that imposed a ceiling on land holdings, redistributed above-ceiling lands to landless and smallholder households, and severely restricted the transferability of the redistributed farm lands. We study this reform in the context of an industry model of agriculture with a non-degenerate distribution of farm sizes featuring an occupation decision and a technology choice of farm operators. In this model, the land reform can reduce agricultural productivity not only by misallocating resources across farmers but also by distorting farmers' occupation and technology decisions. The model, calibrated to pre-reform farm-level data in the Philippines, implies that on impact the land reform reduces average farm size by 34% and agricultural productivity by 17%. The government assignment of land and the ban on its transfer are key for the magnitude of the results since a market allocation of the above-ceiling land produces about 1/3 of the size and productivity effects. These results emphasize the potential role of land market efficiency for misallocation and productivity in the agricultural sector.

JEL-codes: O11 O13 O14 O4 O53 Q1 R2 R52 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr, nep-dev, nep-eff and nep-sea
Date: 2019-04
Note: DEV EFG PR
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Related works:
Working Paper: Land Reform and Productivity: A Quantitative Analysis with Micro Data (2019) Downloads
Working Paper: Land Reform and Productivity: A Quantitative Analysis with Micro Data (2015) Downloads
Working Paper: Land Reform and Productivity: A Quantitative Analysis with Micro Data (2014) Downloads
Working Paper: Land Reform and Productivity: A Quantitative Analysis with Micro Data (2014) Downloads
Working Paper: Land Reform and Productivity: A Quantitative Analysis with Micro Data (2012) Downloads
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