Land Reform and Productivity: A Quantitative Analysis with Micro Data

Tasso Adamopoulos and Diego Restuccia

Working Papers from University of Toronto, Department of Economics

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 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, a land reform reduces agricultural productivity not only by reallocating resources from large/high productivity farms to existing small/low productivity farms (misallocation effect), but also by distorting farmers' occupation and technology adoption decisions (selection effect). 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 percent and agricultural productivity by 17 percent. 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 only 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.

Keywords: agriculture; misallocation; within-farm productivity; land reform. (search for similar items in EconPapers)
JEL-codes: O11 O14 O4 (search for similar items in EconPapers)
Pages: Unknown pages
Date: 2014-04-04
New Economics Papers: this item is included in nep-agr, nep-eff, nep-ger and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

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Related works:
Journal Article: Land Reform and Productivity: A Quantitative Analysis with Micro Data (2020)
Working Paper: Land Reform and Productivity: A Quantitative Analysis with Micro Data (2019)
Working Paper: Land Reform and Productivity: A Quantitative Analysis with Micro Data (2019)
Working Paper: Land Reform and Productivity: A Quantitative Analysis with Micro Data (2015)
Working Paper: Land Reform and Productivity: A Quantitative Analysis with Micro Data (2014)
Working Paper: Land Reform and Productivity: A Quantitative Analysis with Micro Data (2012)
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