Heterogeneity, Measurement Error and Misallocation: Evidence from African Agriculture / Douglas Gollin, Christopher R. Udry.

Format:

Book

Author/Creator:

Gollin, Douglas.

Contributor:

National Bureau of Economic Research.

Udry, Christopher R.

Series:

Working Paper Series (National Bureau of Economic Research) no. w25440.

NBER working paper series no. w25440

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Heterogeneity, Measurement Error and Misallocation

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2019.

Summary:

Standard measures of productivity display enormous dispersion across farms in Africa. Crop yields and input intensities appear to vary greatly, seemingly in conflict with a model of efficient allocation across farms. In this paper, we present a theoretical framework for distinguishing between measurement error, unobserved heterogeneity, and potential misallocation. Using rich panel data from farms in Tanzania and Uganda, we estimate our model using a flexible specification in which we allow for several kinds of measurement error and heterogeneity. We find that measurement error and heterogeneity together account for a large fraction - as much as ninety percent -- of the dispersion in measured productivity. In contrast to some previous estimates, we suggest that the potential for efficiency gains through reallocation of land across farms and farmers may be relatively modest.

Notes:

Print version record

January 2019.