Too Small to Be Beautiful? : The Farm Size and Productivity Relationship in Bangladesh
This paper examines the agricultural productivity–farm size relationship in the context of Bangladesh. Features of Bangladesh's agriculture help overcome several limitations in testing the inverse farm size–productivity relationship in other d...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2018
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/925511522248076351/Too-small-to-be-beautiful-the-farm-size-and-productivity-relationship-in-Bangladesh http://hdl.handle.net/10986/29567 |
| Summary: | This paper examines the agricultural
productivity–farm size relationship in the context of
Bangladesh. Features of Bangladesh's agriculture help
overcome several limitations in testing the inverse farm
size–productivity relationship in other developing country
settings. A stochastic production frontier model is applied
using data from three rounds of a household panel survey to
estimate simultaneously the production frontier and the
technical inefficiency functions. The “correlated random
effects” approach is used to control for unobserved
heterogeneous household effects. Methodologically, the
results suggest that the stochastic production frontier
models that ignore the inefficiency function are likely
mis-specified, and may result in misleading conclusions on
the farm size–productivity relationship. Empirically, the
findings confirm that the farm size and productivity
relationship is negative, but with the inverse relationship
diminishing over time. Total factor productivity growth,
driven by technical change, is found to have been robust
across the sample. Across farm size groups, the relatively
larger farmers experienced faster technical change, which
helped them to catch up and narrow the productivity gap with
the smaller farmers. |
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