INVERSE RELATIONSHIP BETWEEN PRODUCTIVITY AND FARM SIZE: THE CASE OF CHINA |
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| Authors: | ZHUO CHEN WALLACE E HUFFMAN SCOTT ROZELLE |
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| Institution: | 1. Chen: Visiting Scholar, Chicago Center of Excellence in Health Promotion Economics, The University of Chicago, 1600 Clifton Rd NE, MS‐E33, Atlanta, GA 30333. Phone 404‐498‐6317, Fax 404‐498‐1111, E‐mail zchen1@cdc.gov;2. Huffman: Charles F. Curtiss Distinguished Professor of Agriculture and Professor of Economics, Department of Economics, Iowa State University, Heady Hall 260, Ames, IA 50011. Phone 515‐294‐6359, Fax 515‐294‐0221, E‐mail whuffman@iastate.edu |
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| Abstract: | In developing agricultures, past research has suggested an inverse relationship between farm productivity and size. The raw data from China show such an inverse relationship. However, the inverse relationship disappears after we instrument for land area using the fact that one of the objectives of the land allocation process in rural China is to ensure local households to meet their nutritional needs. The empirical inverse relationship is likely due to the failure to account for the unobserved land quality that is unevenly distributed across the farm size continuum, rather than inherent to China's agriculture. (JEL O13, Q12, Q15) |
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