New article co-authored by Douglas Gollin explores differences in productivity across farms in Africa
A new paper co-authored by Douglas Gollin develops a framework to explore whether differences in productivity between farms in Africa are due to measurement error, unobserved heterogeneity, or potential misallocation.
The paper is co-authored with Christopher Udry of Northwestern University.
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, the authors present a theoretical framework for distinguishing between measurement error, unobserved heterogeneity, and potential misallocation. Using rich panel data from farms in Tanzania and Uganda, they estimate the model using a flexible specification in which they allow for several kinds of measurement error and heterogeneity.
They find that measurement error and heterogeneity together account for a large fraction of the dispersion in measured productivity.
Douglas Gollin and Christopher Udry (2021) 'Heterogeneity, Measurement Error, and Misallocation: Evidence from African Agriculture', Journal of Political Economy, DOI: 10.1086/711369