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Agricultural Labour Productivity: Are Small-Holder Farmers Inefficient or Do We Overestimate Their Labour Input?

by Kathleen Beegle, Joachim De Weerdt, Amparo Palacios-Lopez | Monday, December 07, 2015

Arthi, et al. (2015) present strong evidence that labour inputs are exaggerated when measured through typical labour recall modules. This implies that ceteris paribus estimates of farm labour productivity based on surveys implementing such modules are underestimated. The measurement of labour productivity, however, depends on the measurement of all other inputs in the farming process, all of which are also potentially subject to measurement error depending on how the survey is implemented. While the ceteris paribus condition holds for actual inputs as a result of the random assignment respondents to the various experimental arms, it is unclear whether it also holds with respect to measured inputs. This paper investigates whether own farm labour productivity is exaggerated when we calculate it through standard regression-based labour productivity estimates.

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