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Title: The Role of Crop Type in Cross-Country Income Differences

Author(s): Markus Eberhardt and Dietrich Vollrath

Publication Date: April 2016

Keyword(s): agricultural development, crop type, structural change and technology heterogeneity

Programme Area(s): Macroeconomics and Growth

Abstract: 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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Bibliographic Reference

Eberhardt, M and Vollrath, D. 2016. 'The Role of Crop Type in Cross-Country Income Differences'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=11248