Morando, Bruno (2023) Subsistence Farming and Factor Misallocation: Evidence from Ugandan Agriculture. The World Bank Economic Review, 37 (4). pp. 570-598. ISSN 0258-6770

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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.

Item Type:	Article
Keywords:	misallocation; productivity; agriculture; Uganda;
Academic Unit:	Faculty of Social Sciences > Economics, Finance and Accounting
Item ID:	19138
Identification Number:	https://doi.org/10.1093/wber/lhad017
Depositing User:	Bruno Morando
Date Deposited:	31 Oct 2024 14:53
Journal or Publication Title:	The World Bank Economic Review
Publisher:	Oxford University Press
Refereed:	Yes
URI:	Publisher
Use Licence:	This item is available under a Creative Commons Attribution Non Commercial Share Alike Licence (CC BY-NC-SA). Details of this licence are available here

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