Domestic Trade Frictions and Agriculture

By Sebastián Sotelo. Journal of Political Economy, 2015

115 citations recorded by the source corpus.

I develop a model of agriculture on heterogeneous land to study the relation between trade, productivity, and welfare in Peru, where farmers face high internal and external trade costs. I quantify the model with new data on crop prices, yields, and land allocations. I then measure the effects of changes to trade opportunities. A policy of paving roads raises aggregate productivity (4.9%) and the median farmer’s welfare (2.7%), but increased competition from remote suppliers harms 20% of farmers. An increase in international grain prices spreads unevenly across regions, benefiting farmers but hurting urban consumers close to ports.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/0645aa4ee4ee2191e647ebe61192fdef27b455d0

Citations in the corpus

• Does investment in national highways help or hurt hinterland city growth? (2018, unknown): “…takes a different approach to xamining the effects of national transport systems (e.g. Donaldson, 018; Donaldson and Hornbeck, 2016; Alder, 2015; Sotelo, 2015; Allen nd Arkolakis, 2014; Bartelme, 2015; Fajgelbaum and Redding, 2014; ombe and Zhu, 2015; Balboni, 2017 ), including an early version…”