[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-detail-113181-en":3,"doc-seo-113181-105":29,"detail-sidebar-cat-0-en-105":90},{"code":4,"msg":5,"data":6},0,"success",{"doc_id":7,"user_id":8,"nickname":9,"user_avatar":10,"doc_module":4,"category_id":11,"category_name":12,"doc_title":13,"doc_description":14,"doc_content":15,"file_id":16,"file_url":17,"file_type":18,"file_size":19,"view_count":4,"is_deleted":4,"is_public":20,"is_downloadable":20,"audit_status":20,"page_count":21,"language":22,"language_code":23,"site_id":24,"html_lang":23,"table_of_contents":25,"faqs":26,"seo_title":13,"seo_description":14,"update_tm":27,"read_time":28},113181,4810365810221,"Aurora","https://ap-avatar.wpscdn.com/davatar_155a257f0dc6eb9ab79c44ca47cae57d",8,"Research & Report","Subsistence Farming and Factor Misallocation - Evidence from Ugandan Agriculture","This paper presents a model in which misallocation of agricultural production factors is driven by transportation costs to and from local markets, causing an inefficiently large share of inputs to be used by less productive subsistence farmers. Using a representative census of Ugandan farms, the study derives testable predictions and verifies them empirically. Efficiency losses are larger where subsistence farming is more widespread due to weaker market connectivity. No link is found between misallocation and credit access or land-market activity.","Pub lic Disclosure Authorized Pub lic Disclosure Authorized  \nThe World Bank Economic Review, 37(4), 2023, 570–598  \n[https://doi.org10.1093/wber/lhad017](https://doi.org10.1093/wber/lhad017)  \nArticle  \nSubsistence Farming and Factor Misallocation: Evidence from Ugandan Agriculture  \nBruno Morando  \nAbstract  \nThis paper presents a model where misallocation in the agricultural factors of production is caused by transportation costs to and from local markets, which result in an inefficiently large share of inputs operated by less productive subsistence farmers. The model derives some testable predictions which are verified in the empirical analysis, based on a representative census of Ugandan farms. Specifically, subsistence farmers operate inefficiently high shares of land and capital and the efficiency losses are more severe in areas where subsistence farming is more widespread, due to lower connectivity with local markets. Conversely, there is no relationship between the level of misallocation and credit access and/or land-market activity. These findings suggest that transportation costs play a key role in determining the efficiency of agricultural input distribution and that land-market liberalization is a necessary but not sufficient condition to tackle misallocation.  \nJEL classification: Q14, O40, O13  \nKeywords: misallocation, productivity, agriculture, Uganda  \n1. Introduction  \nA growing body of literature (Restuccia and Santaeulalia-Llopis 2017; Chen et al. 2017; Ayerst et al. 2020; Chari et al. 2021; Chen et al. 2021; Adamopoulos et al. 2022) attributes low agricultural productivity in developing countries to factor misallocation. The core hypothesis is that institutional barriers to land rentals/sales (which are common in the developing world) prevent the reallocation of resources from less to more able producers and ultimately result in sizeable efficiency losses.  \nGiven the existing evidence of widespread failures in rural markets (Dillon and Barrett 2017), it is plausible that formal restrictions to input transactions represent only one of the determinants of resource misallocation and that other factors contribute to the observed inefficiencies in input distribution. However, with the exception of the work on credit markets by Shenoy (2017) and the recent paper by Britoset al. (2021) looking also at road connectivity, ethnicity, and education, the role of concurrent factors has not been explored by the existing literature.  \nThis paper aims to fill this gap by considering the role of transportation costs to and from local markets in determining resource misallocation in agriculture. This is motivated by the fact that, especially in  \nBruno Morando is a lecturer (assistant professor) at Maynooth University, Maynooth, Ireland; his email address is [bruno.morando@mu.ie. The](bruno.morando@mu.ie. The) author would like to thank Salvatore Di Falco, Douglas Gollin, Tara Mitchell, and Carol Newman for their valuable comments and support. The author is also grateful to the editor Norman Loayza and two anonymous referees for their insights and feedback. A supplementary online appendix is available with this article at The World Bank Economic Review website.  \n􀀂C The Author(s) 2023. Published by Oxford University Press on behalf of the International Bank for Reconstruction and Development / THE WORLD BANK. This is an Open Access article distributed under the terms of the Creative Commons Attribution License ([https://creativecommons.org/licenses/by/4.0/](https://creativecommons.org/licenses/by/4.0/)), which permits unrestricted reuse, distribution, and reproduction in any medium, provided the original work is properly cited.  \nDownloaded from [https://academic.oup.com/wber/article/37/4/570/7220142 by University of Oxford user on](https://academic.oup.com/wber/article/37/4/570/7220142 by University of Oxford user on) 12 December 2023  \nSub-Saharan Africa, farmers typically produce mostly for self-consumption and sell a ","cbCais0BpylRmLTc","https://ap.wps.com/l/cbCais0BpylRmLTc","pdf",1706708,1,29,"English","en",105,"# Introduction\n## Transportation costs and market access\n## Evidence from Ugandan farm census","[{\"question\":\"How do transportation costs affect factor misallocation in Ugandan agriculture?\",\"answer\":\"Transportation costs to and from local markets create a wedge that makes market access costly, leading to an inefficiently large subsistence sector and factor misallocation among farmers.\"},{\"question\":\"What does the evidence show about subsistence farmers and input use efficiency?\",\"answer\":\"Subsistence farmers operate inefficiently high shares of land and capital, and the associated efficiency losses increase in areas with more widespread subsistence farming.\"},{\"question\":\"Does the paper find that credit access or land-market activity explains misallocation?\",\"answer\":\"No. The empirical results show no relationship between the magnitude of misallocation and credit access and/or land-market 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