Land Reform and Productivity: A Quantitative Analysis with Micro Data

Resource Type
  • Adamopoulos, Tasso (York University (Canada))
  • Restuccia, Diego (University of Toronto)
Publication Date
Free Keywords
agriculture; productivity; land reform; misallocation; land market; crop choice
  • Abstract

    We assess the effects of a major land policy change on farm size and agricultural productivity using a quantitative model and micro-level data. We study the 1988 land reform in the Philippines that imposed a ceiling on land holdings, redistributed above-ceiling lands to landless and smallholder households, and severely restricted the transferability of the redistributed farm lands. We study this reform in the context of an industry model of agriculture with a non-degenerate distribution of farm sizes featuring an occupation decision and a technology choice of farm operators. In this model, the land reform can reduce agricultural productivity not only by misallocating resources across farmers but also by distorting farmers' occupation and technology decisions. The model, calibrated to pre-reform farm-level data in the Philippines, implies that on impact the land reform reduces average farm size by 34 percent and agricultural productivity by 17 percent. The government assignment of land and the ban on its transfer are key for the magnitude of the results since a market allocation of the above-ceiling land produces about 1/3 of the size and productivity effects. These results emphasize the potential role of land market efficiency for misallocation and productivity in the agricultural sector.

Temporal Coverage
  • 1984-01-01 / 2004-12-31
    Time Period: Sun Jan 01 00:00:00 EST 1984--Fri Dec 31 00:00:00 EST 2004 (Four rounds interviews 1984-5 and 2003-4)
Geographic Coverage
  • Aggregate and sectoral data for the Philippines, household level data from Phillipines (Cash Cropping Project) Bukidnon province, island of Mindanao
  • Adamopoulos, Tasso, and Diego Restuccia. “Land Reform and Productivity: A Quantitative Analysis with Micro Data.” American Economic Journal: Macroeconomics, n.d.

Update Metadata: 2020-06-23 | Issue Number: 1 | Registration Date: 2020-06-23