Publication: Subsistence Farming and Factor Misallocation: Evidence from Ugandan Agriculture
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Date
2023-07-06
ISSN
0258-6770 (print)
1564-698X (online)
1564-698X (online)
Published
2023-07-06
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Abstract
This paper presents a model where misallocation in the agricultural factors of production is caused by transportation costs to and from local markets, which result in an inefficiently large share of inputs operated by less productive subsistence farmers. The model derives some testable predictions which are verified in the empirical analysis, based on a representative census of Ugandan farms. Specifically, subsistence farmers operate inefficiently high shares of land and capital, and the efficiency losses are more severe in areas where subsistence farming is more widespread, due to lower connectivity with local markets. Conversely, there is no relationship between the level of misallocation and credit access and/or land-market activity. These findings suggest that transportation costs play a key role in determining the efficiency of agricultural input distribution and that land-market liberalization is a necessary but not sufficient condition to tackle misallocation.
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“Morando, Bruno. 2023. Subsistence Farming and Factor Misallocation: Evidence from Ugandan Agriculture. World Bank Economic Review. © Published by Oxford University Press on behalf of the World Bank. http://hdl.handle.net/10986/41294 License: CC BY-NC-ND 3.0 IGO.”
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World Bank Economic Review
1564-698X
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- Cited 3 times in Scopus (view citations)