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 misallocating resources from large/high productivity farms to incumbent small/low productivity farms, but also by distorting farmers' occupation and technology adoption 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 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: 2014-12-09
New Economics Papers: this item is included in nep-agr, nep-eff 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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