The Role of Crop Type in Cross-Country Income Differences

58 Pages Posted: 4 May 2016

See all articles by Markus Eberhardt

Markus Eberhardt

University of Nottingham - Leverhulme Centre for Research on Globalisation and Economic Policy (GEP)

Dietrich Vollrath

University of Houston - Department of Economics

Date Written: April 2016

Abstract

Labor productivity and labor share in the agricultural sector are key determinants of living standards across countries. We show that differences in agricultural technology -- the coefficients on factor inputs in the production function -- account for a substantial portion of cross-country differences in agricultural labor productivity, agricultural labor share, and per capita income. In a panel of 100 countries we document differences in technology estimates associated with major crops, and then illustrate the quantitative implications for development. Counterfactually eliminating crop-type technology heterogeneity reduces variance in log income per capita by 25%, and raises the median by 60%.

Keywords: agricultural development, crop type, structural change, technology heterogeneity

JEL Classification: C23, F63, O11, O47, Q16

Suggested Citation

Eberhardt, Markus and Vollrath, Dietrich, The Role of Crop Type in Cross-Country Income Differences (April 2016). CEPR Discussion Paper No. DP11248, Available at SSRN: https://ssrn.com/abstract=2774362

Markus Eberhardt (Contact Author)

University of Nottingham - Leverhulme Centre for Research on Globalisation and Economic Policy (GEP) ( email )

University Park
Nottingham, NG7 2RD
United Kingdom

Dietrich Vollrath

University of Houston - Department of Economics ( email )

Houston, TX 77204-5882
United States

HOME PAGE: http://www.uh.edu/~devollra

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