Close to the edge: High productivity at plot peripheries and the inverse size-productivity relationship

Bevis, Leah; Barrett, Christopher B.

doi:10.1016/j.jdeveco.2019.102377

Cited by 64 publications

(78 citation statements)

References 46 publications

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“…Similarly, some plot characteristics (number of corners and crop-cut distance to the edge) appear to be significant only when we use crop-cut production along with self-reported plot size (Column (3) of Table 4). These spurious correlations between productivity and plot characteristics are potentially driven by farmers misperception of plot size and associated endogenous investments, consistent with the behavioral mechanisms hypothesized by Bevis and Barrett (2017). More generally, these pieces of evidence suggest that the implication of NCME in size and production may go beyond the inverse relationship and hence affect other relationships and inferences.…”

Section: Measurement Errors and The Estimated Size -Productivity Relasupporting

confidence: 58%

“…Controling for a number of characteristics -and in particular soil type -leads to a negative estimated β 1 parameter, relatively small in magnitude, and statistically insignificant, pointing to the absence of clear relationship between plot size and productivity amongst wheat farmers in Ethiopia. Our proxy for the edge effect that Bevis and Barrett (2017) hypothesize could explain the inverse SPR, distance of crop-cut from the edge, is also statistically insignificant. In what follows, we compare the parameter estimates from Equations (9), (10) and (11) against the null benchmark of β 1 = 0.…”

Section: Measurement Errors and The Estimated Size -Productivity Relamentioning

confidence: 75%

“…Bevis and Barrett (2017) provide another new behavioral explanation for the inverse relationship between farm size and productivity. They argue that productivity may be higher around the periphery of plots, partly for biophysical edge effect reasons (e.g., improved access to sunlight) but mainly for behavioral reasons (e.g., greater observability of edges).…”

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confidence: 97%

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Correlated non-classical measurement errors, ‘Second best’ policy inference, and the inverse size-productivity relationship in agriculture

Abay

Abate

Barrett

et al. 2019

Journal of Development Economics

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113

126

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We show analytically and empirically that non-classical measurement errors (NCME) in the two key variables in a hypothesized relationship can bias the estimated relationship between them in any direction. Furthermore, if these measurement errors are correlated, correcting for either NCME alone can aggravate bias in the parameter estimate of interest relative to ignoring mismeasurement in both variables, a 'second best' result with implications for a broad class of economic phenomena of policy interest. We use numerical simulation to illustrate the parameter space over which a second best approach of not correcting one variable's NCME dominates correcting it. We then illustrate these results empirically by demonstrating the implications of mismeasured agricultural output and plot size for the long-debated (inverse) relationship between size and productivity. Our data from Ethiopia show large discrepancies between farmer self-reported and directly measured values of crop output and plot size. These NCME are strongly, negatively correlated with the true variable values and strongly, positively correlated with one another. In these data, correlated NCME generate a strong but largely spurious estimated inverse size-productivity relationship. And in line with our analytical result, correcting for just one source of NCME aggravates the bias in the parameter estimate of interest. JEL Codes: C81, O12, Q12, Q15

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Section: Measurement Errors and The Estimated Size -Productivity Relasupporting

confidence: 58%

Section: Measurement Errors and The Estimated Size -Productivity Relamentioning

confidence: 75%

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Correlated non-classical measurement errors, ‘Second best’ policy inference, and the inverse size-productivity relationship in agriculture

Abay

Abate

Barrett

et al. 2019

Journal of Development Economics

Self Cite

113

126

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“…While some studies confirm the presence of an inverse farm size–productivity relationship (e.g., Larson et al., ), which postulates that small farms are more productive per unit of land than large farms, other studies find evidence to the contrary or inconclusive results (e.g., Desiere and Jolliffe, ; Dürr, ; Helfand and Levine, ; Karagiannis and Sarris, ). Inappropriate analytical methods and measurement errors, commonly associated with self‐reported land area and production data, are partly responsible for the inconsistent results reported in the literature (Bevis and Barrett ; Binswanger et al., ; Carletto et al., ; Desiere and Jolliffe, ; Gourlay et al., ; Kalaitzandonakes et al., ; Savastano and Scandizzo ). Previous research approaches test the inverse relationship between farm size and efficiency using partial measures of productivity, usually regressing output per unit of area (e.g., yield, revenue, or profit per hectare) on the farm size variable (Barrett et al., ; Carletto et al., ; Desiere and Jolliffe, ; Dorward, ; Heltberg, ; Kimhi, ; Larson et al., ).…”

Section: Introductionmentioning

confidence: 99%

“…On the other hand, Desiere and Jolliffe (), who applied a similar econometric approach to a sample of Ethiopian farmers, could not establish the existence of the inverse relationship when crop cuts data were used to measure yields. However, their analysis revealed a strong inverse relationship when self‐reported yield data were used, suggesting the presence of systematic measurement errors in household surveys—that is, over‐ or under‐estimation of production and land area (Bevis and Barrett ; Carletto et al., ; Desiere and Jolliffe ; Gourlay et al., ; Larson et al., ; Savastano and Scandizzo ).…”

Section: Introductionmentioning

confidence: 99%

Examining the relationship between farm size and productive efficiency: a Bayesian directional distance function approach

Khataza

Hailu

Doole

et al. 2019

Agricultural Economics

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Achieving sustainable food security and increased farm income will depend on how efficient production systems are in converting available inputs to produce outputs. Using data from Malawi, we estimate a Bayesian directional technology distance function to examine the relationship between farm size and technical efficiency. Our results support the existence of an inverse relationship between farm size and productive efficiency, where small farms are more efficient than large farms. On average, farms exhibit inefficiency levels of 60%, suggesting that productivity could be improved substantially. Improving productive efficiency and food security will require farms to operate in ways where the size of cultivated area is matched by nonland production inputs such as labor, fertilizer, and improved seeds. The results highlight the need for policies that could incentivize farmers to adopt productivity-enhancing technologies and, where possible, to allocate excess land to lease markets. JEL classifications: C11, D24, Q12

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In‐kind credit provision through contract farming and formal credit markets

Ruml

Parlasca

2021

Agribusiness

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Access to credit is a key prerequisite for the development of smallholder agriculture. However, rural credit markets are typically characterized by market failures and smallholder credit access is limited. Resource‐providing contracts are an institutional tool to overcome credit market failures through the provision of production inputs in the form of in‐kind credit. Previous research has shown that interlinkage of contract and credit helps farmers overcome financial constraints, foster production investments, and hence increase productivities and income. However, if and how such contract schemes affect farmers' overall demand for and access to formal credit from other sources is not yet well understood. In this article, we therefore investigate the associations of the provision of in‐kind credit and farming households' formal credit demand and ability to receive formal credit. We use data of 463 oil palm producers in Ghana and show that participation in contract farming is associated with an increase in credit demand. Concerning credit approval, we find that the outstanding debt of the in‐kind credit scheme is associated with a substantially lower likelihood of credit acceptance. However, the results also suggest that farmers can fully compensate this negative effect by informing the bank about the contract, and thus the source of the debt. This indicates that debt acquired from resource‐providing contract schemes does not necessarily pose an additional credit constraint to farmers. [EconLit Citation G21, G23, O16, O17].

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Close to the edge: High productivity at plot peripheries and the inverse size-productivity relationship

Cited by 64 publications

References 46 publications

Correlated non-classical measurement errors, ‘Second best’ policy inference, and the inverse size-productivity relationship in agriculture

Correlated non-classical measurement errors, ‘Second best’ policy inference, and the inverse size-productivity relationship in agriculture

Examining the relationship between farm size and productive efficiency: a Bayesian directional distance function approach

In‐kind credit provision through contract farming and formal credit markets

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