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Testing Household‐Specific Explanations for the Inverse Productivity Relationship
Author(s) -
Assunção Juliano J.,
Braido Luis H. B.
Publication year - 2007
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1111/j.1467-8276.2007.01032.x
Subject(s) - productivity , economics , econometrics , shadow price , shadow (psychology) , inverse , mathematics , macroeconomics , psychology , mathematical optimization , geometry , psychotherapist
The inverse relationship between land productivity and farm size is an old and puzzling empirical regularity. Most explanations for this relationship rely on market imperfections that jointly determine the farm size and the household's shadow price of some productive inputs. We use plot‐level data from the ICRISAT/VLS to assess whether these household‐specific theories can explain the puzzle. The data exhibit plots of different sizes being simultaneously cropped by the same household. The inverse relationship is shown to hold true with the same magnitude across the plots of each household, thus cross‐household heterogeneity does not suffice to explain the puzzle.