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Productivity, technical efficiency, and farm size

One of the important economic arguments in favor of the equitable distribution of farmland is that smaller farms are more productive. A large portion of the economic development literature is devoted to this topic, with arguments going both for and against the notion that smaller farms are more productive. This essay, on the relationship between farm size and productivity, builds on the study J. Mohan Rao and I completed for the UNDP and Ministerio de Hacienda del Paraguay (Masterson and Rao 1999). This essay departs from the earlier work, using more recent data, allowing for comparison between two time periods, and by employing both stochastic and nonparametric techniques for generating technical efficiency measurements, an alternative to the factor productivity measures used in the original study.



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