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A large fraction of Uganda's population continues to earn a living from quasi-subsistence agriculture. This paper uses a static general equilibrium model to explore the relationships between high transportation costs, low productivity, and the size of the quasi-subsistence sector. We parameterize the model to replicate some key features of the Ugandan data, and we then perform a series of quantitative experiments. Our results suggest that the population in quasi-subsistence agriculture is highly sensitive both to agricultural productivity levels and to transportation costs. The model also suggests positive complementarities between improvements in agricultural productivity and transportation.

Zonder onderwerpscode: economie

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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 - as much as ninety percent -- of the dispersion in measured productivity. In contrast to some previous estimates, we suggest that the potential for efficiency gains through reallocation of land across farms and farmers may be relatively modest.

Zonder onderwerpscode: economie