Capital Obsolescence and Agricultural Productivity

Elisa Keller and Julieta Caunedo

No 686, 2016 Meeting Papers from Society for Economic Dynamics

Abstract: Cross-country disparities in agricultural productivity are large and on average, larger than in other sectors of the economy. This paper studies the role of capital-embodied technology adoption in explaining these cross-country disparities. We construct a novel data set of second-hand prices of agricultural equipment (tractors) across countries. We then present a vintage capital model that links equipment prices to the quality and composition of the stock of capital. In particular, a) the path of the best available equipment quality in a country is linked to the evolution of the price of any piece of equipment through time; and b) the composition of the capital stock is linked to cross country dierences in the price level of a piece of equipment. Using the unique characteristics of our data set, we document that countries with higher agricultural labor productivity have steeper age-price proles for tractors with comparable characteristics. We find that quality disparities in the stock of capital explain 24% of the differences in agricultural productivity growth across countries. Moreover, one-third of the disparities in the level of productivity can be accounted for by disparities in capital embodied technology.

Date: 2016
New Economics Papers: this item is included in nep-eff
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Citations: View citations in EconPapers (5)

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Journal Article: Capital Obsolescence and Agricultural Productivity* (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed016:686

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