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Isolation and agricultural productivity
Article first published online: 28 JUN 2008
DOI: 10.1111/j.1574-0862.2008.00310.x
© 2008 International Association of Agricultural Economists
Additional Information
How to Cite
Stifel, D. and Minten, B. (2008), Isolation and agricultural productivity. Agricultural Economics, 39: 1–15. doi: 10.1111/j.1574-0862.2008.00310.x
Publication History
- Issue published online: 28 JUN 2008
- Article first published online: 28 JUN 2008
- Received 8 August 2007; received in revised form 18 December 2007; accepted 21 January 2008
Keywords:
- O13;
- Q12;
- R32
- Transport costs;
- Transaction costs;
- Regional development
Abstract
This article examines the mechanisms that transmit isolation into productivity. In particular, we study the effect of isolation and transport infrastructure on welfare and agricultural productivity in the case of Madagascar. Madagascar is a good case study given the bad shape of its infrastructure and therefore the significant variation in isolation. Based on comprehensive household survey data combined with a census of communes, we discover a strong poverty–isolation relationship. Further we find the inverse relationship between agricultural productivity and isolation to be surprisingly strong. We isolate the following reasons why productivity might decline with isolation: (i) transportation-induced transaction costs, (ii) the inverse relationship between plot size and productivity, (iii) increasing price variability and extensification onto less fertile land, and (iv) insecurity.