Land Distribution and International Agricultural Productivity

Abstract

The unequal distribution of agricultural land is often cited as a source of inefficiency in agriculture. Previous cross‐country studies of agricultural productivity differences, though, have not considered land inequality. This article addresses this issue by using cross‐country data on inequality in operational holdings of agricultural land from Deininger and Squire (1998). In an estimation of an agricultural production function, the Gini coefficient for land holdings is found to have a significant negative relationship with productivity. This is consistent with the existence of heterogeneity in productivity by farm size within countries. A one standard deviation drop in the Gini coefficient implies an increase in productivity of 8.5%.