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Farm Size Distribution, Weather Shocks, and Agricultural Productivity

Author

Listed:
  • Arteaga, Julián

    (World Bank)

  • de Roux, Nicolás

    (Universidad de los Andes)

  • Gáfaro, Margarita

    (Banco de la República)

  • Ibáñez, Ana María

    (Banco Interamericano de Desarrollo - IADB)

  • Pellegrina, Heitor

    (University of Notre Dame)

Abstract

This paper studies the dynamics of farm size distribution, how they are influenced by weather shocks, and the implications for aggregate productivity. Using data from several developing countries, we first document new empirical facts about households’ landholding choices and how weather shocks influence these decisions. Building on a rich longitudinal dataset for Colombia on farm sizes, land transactions, and households’ consumption and investment decisions, we then show that weather shocks increase the frequency of land sales and reduce farm sizes within municipalities, especially among smaller farms. To rationalize these facts, we develop a dynamic, heterogeneous household model in which uninsured farmers make landholding and occupational choices. Our calibrated model shows that uninsured risk substantially curbs aggregate agricultural productivity, and that the effects of temporary weather shocks on farm size and agricultural output are highly persistent, taking more than a decade to fade out.

Suggested Citation

  • Arteaga, Julián & de Roux, Nicolás & Gáfaro, Margarita & Ibáñez, Ana María & Pellegrina, Heitor, 2025. "Farm Size Distribution, Weather Shocks, and Agricultural Productivity," Documentos CEDE 21308, Universidad de los Andes, Facultad de Economía, CEDE.
  • Handle: RePEc:col:000089:021308
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    References listed on IDEAS

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    More about this item

    Keywords

    Farm Size; Weather Shocks; Aggregate Shocks; Heterogeneous Agent Model;
    All these keywords.

    JEL classification:

    • D52 - Microeconomics - - General Equilibrium and Disequilibrium - - - Incomplete Markets
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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