Isolation and Agricultural Productivity

Posted: 17 Nov 2008

See all articles by Bart Minten

Bart Minten

Cornell University - Food and Nutrition Policy Program; Catholic University of Leuven (KUL) - Department of Agro-Engineering and Economics

David C. Stifel

Lafayette College

Date Written: August 22, 2008

Abstract

This article examines the mechanisms that transmit isolation into productivity. In particular, we study the effect of isolation and transport infrastructure on welfare and agricultural productivity in the case of Madagascar. Madagascar is a good case study given the bad shape of its infrastructure and therefore the significant variation in isolation. Based on comprehensive household survey data combined with a census of communes, we discover a strong poverty-isolation relationship. Further we find the inverse relationship between agricultural productivity and isolation to be surprisingly strong. We isolate the following reasons why productivity might decline with isolation: (i) transportation-induced transaction costs, (ii) the inverse relationship between plot size and productivity, (iii) increasing price variability and extensification onto less fertile land, and (iv) insecurity.

Keywords: transport costs, transaction costs, regional development

JEL Classification: O13, Q12, R32

Suggested Citation

Minten, Bart and Stifel, David C., Isolation and Agricultural Productivity (August 22, 2008). Agricultural Economics, Vol. 39, No. 1, 2008, Available at SSRN: https://ssrn.com/abstract=1247446

Bart Minten

Cornell University - Food and Nutrition Policy Program ( email )

BP 6313
Antananarivo 101
Madagascar
033 11 38520 (Phone)
261 20 2222198 (Fax)

Catholic University of Leuven (KUL) - Department of Agro-Engineering and Economics ( email )

Kardinaal Mercierlaan 92
Heverlee, B-3001
Belgium

David C. Stifel (Contact Author)

Lafayette College ( email )

Easton, PA 18042
United States

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