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Working paper 541
Diego Restuccia and Raul Santaeulalia-Llopis, "Land Misallocation and Productivity", 2015-05-16
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Abstract: Using detailed household-farm level data from Malawi, we measure real farm total factor productivity (TFP) controlling for a wide array of factor inputs, land quality, and transitory shocks. The distribution of farm TFP has substantial dispersion but factor inputs are roughly evenly spread among farmers, implying a strong negative effect on agricultural productivity. A reallocation of factors to their efficient use among existing farmers would increase agricultural productivity by a factor of 3.6-fold. The gains from reallocation are 2.6 times larger for farms with no marketed land than for farms that operate marketed land.

Keywords: misallocation, land, productivity, agriculture, Malawi, micro data.

JEL Classification: O1, O4.