Assessing Misallocation in Agriculture: Plots Versus Farms

21 Pages Posted: 14 Feb 2022 Last revised: 15 Oct 2022

See all articles by Fernando M. Aragon

Fernando M. Aragon

Simon Fraser University (SFU) - Department of Economics

Diego Restuccia

University of Toronto - Department of Economics

Juan Pablo Rud

University of London, Royal Holloway College - Department of Economics

Date Written: February 2022

Abstract

We assess the extent and cost of misallocation in agriculture in less-developed countries comparing the analysis at the plot and farm levels. Using detailed data from Uganda, we show that the plot-level analysis leads to extremely large estimates of reallocation gains, even after adjusting for measurement error and unobserved heterogeneity. These results reflect two empirical limitations of the plot as unit of analysis: excess measurement error and near constant returns to scale production estimates. We find limited evidence of substantial measurement error at the farm level.

Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Suggested Citation

Aragon, Fernando M. and Restuccia, Diego and Rud, Juan Pablo, Assessing Misallocation in Agriculture: Plots Versus Farms (February 2022). NBER Working Paper No. w29749, Available at SSRN: https://ssrn.com/abstract=4034199

Fernando M. Aragon (Contact Author)

Simon Fraser University (SFU) - Department of Economics ( email )

8888 University Drive
Burnaby, British Columbia V5A 1S6
Canada

Diego Restuccia

University of Toronto - Department of Economics ( email )

150 St. George Street
Toronto, Ontario M5S 3G7
Canada

Juan Pablo Rud

University of London, Royal Holloway College - Department of Economics ( email )

Royal Holloway College
Egham
Surrey, Surrey TW20 0EX
United Kingdom

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
0
Abstract Views
63
PlumX Metrics