Productivity, transport costs and subsistence agriculture

Douglas Gollin, Richard Rogerson

Research output: Contribution to journalArticlepeer-review

121 Scopus citations

Abstract

A defining feature of many poor economies is the large fraction of workers engaged in subsistence agriculture. We develop a multi-sector multi-region model of a poor economy in which it is costly to transport goods across regions in order to study this outcome. A key finding is that higher transport costs drive up the size of the agricultural workforce and the fraction in subsistence. In a calibrated version of our model we show that the effect of transport productivity is quantitatively important in terms of both allocations and welfare.

Original languageEnglish (US)
Pages (from-to)38-48
Number of pages11
JournalJournal of Development Economics
Volume107
DOIs
StatePublished - Mar 2014

All Science Journal Classification (ASJC) codes

  • Development
  • Economics and Econometrics

Keywords

  • Agricultural development
  • Economic development
  • Structural transformation
  • Subsistence agriculture
  • Transport costs
  • Two-sector model

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