DP11248 The Role of Crop Type in Cross-Country Income Differences
|Author(s):||Markus Eberhardt, Dietrich Vollrath|
|Publication Date:||April 2016|
|Keyword(s):||agricultural development, crop type, structural change, technology heterogeneity|
|JEL(s):||C23, F63, O11, O47, Q16|
|Programme Areas:||Macroeconomics and Growth|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=11248|
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%.