The role of crop type in cross-country income differences

Author / Creator

Eberhardt, Markus, author

Available as

Online

Summary

Labor productivity and labor share in the agricultural sector are key determinants of living standards across countries. We show that differences in agricultural technology -- the coefficients on f...

Labor productivity and labor share in the agricultural sector are key determinants of living standards across countries. We show that differences in agricultural technology -- the coefficients on factor inputs in the production function -- account for a substantial portion of cross-country differences in agricultural labor productivity, agricultural labor share, and per capita income. In a panel of 100 countries we document differences in technology estimates associated with major crops, and then illustrate the quantitative implications for development. Counterfactually eliminating crop-type technology heterogeneity reduces variance in log income per capita by 25%, and raises the median by 60%.

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