Heterogeneity, Measurement Error, and Misallocation: Evidence from African Agriculture

By D. Gollin, Christopher R. Udry. Journal of Political Economy, 2019

138 citations recorded by the source corpus.

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 of the dispersion in measured productivity.

Subfields: Economics and Econometrics, General Agricultural and Biological Sciences, Soil Science

View Paper: https://www.semanticscholar.org/paper/73ab687246d5fa3a07768b8034900a1192987877

Citations in the corpus

• Misallocation and Capital Market Integration: Evidence From India (2020, unknown): “…paired with the costly adjustment of inputs (Asker, Collard-Wexler, and De Loecker, 2014; Gollin and Udry, 2021), unobserved heterogeneity in technology (Gollin and Udry, 2021), and informational frictions and uncertainty (David, Hopenhayn, and Venkateswaran, 2016; David and Venkateswaran, 2019).”
• The effects of land markets on resource allocation and agricultural productivity (2017, unknown): “The measurement of the extent of misallocation in poor countries has been emphasized using micro panel data (Restuccia and Santaeulàlia-Llopis, 2017; Gollin and Udry, 2017).”