Technology, Policy Distortions and the Rise of Large Farms

Wenbiao Cai

Departmental Working Papers from The University of Winnipeg, Department of Economics

Abstract: Between 1900 and 2002, mean farm size in the U.S. quadrupled. The increasing dominance of large farms has raised concerns about inequality and questions about the role of policies in fueling this trend. I construct a two-sector model with an endogenous size distribution of farms, and use the model to show that factor endowment and technological change cannot fully account for long-term changes in farm size. Utilizing a novel set of farm-level statistics constructed from historical census of agriculture, I further show that policy distortions to farm size are regressive and are crucial for the rise of large farms.

Pages: 38 pages
Date: 2015-08
New Economics Papers: this item is included in nep-bec and nep-ino
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