Are There Too Many Farms in the World? Labor Market Transaction Costs, Machine Capacities, and Optimal Farm Size
By Andrew D. Foster, Mark R. Rosenzweig. Journal of Political Economy, 2017
232 citations recorded by the source corpus.
We show that labor market transaction costs explain why the smallest farms are more efficient than slightly larger farms in most low-income countries and that increases in machine capacity with operational scale result in the globally observed rising upper tail of productivity. We find evidence consistent with these mechanisms using Indian data, and we show that if all Indian farms were at the minimum scale required to maximize the return on land, the number of farms would be reduced by 82% and income per farm worker would rise by 68%.
Subfields: Economics and Econometrics, Soil Science
View Paper: https://www.semanticscholar.org/paper/75f124d820c8d01bee041a3768a40ef508319260
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In Economics and Econometrics
- Leah E M Bevis
- Christopher B. Barrett
- Michael R. Carter
- H. Michelson
- Shahid Rashid
- L. McBride
- Teevrat Garg
- Patricia Justino
In Soil Science
- Leah E M Bevis
- Christopher B. Barrett
- Michael R. Carter
- Stefan Dercon
- Teevrat Garg
- M. Qaim
- Christophe Béné
- P. Marenya
Citations in the corpus
- Close to the edge: High productivity at plot peripheries and the inverse size-productivity relationship (2020, background): “Measurement around farmer-recalled land size also fails to explain the puzzle (Carletto, Savastano and Zezza, 2013; Carletto, Gourlay and Winters, 2015; Foster and Rosenzweig, 2017), but new evidence suggests that measurement error around farmer-recalled production might, in at least some contexts.”