Land Misallocation and Productivity

Using detailed household-level data from Malawi on physical quantities of agricultural outputs and inputs, we measure farm total factor productivity (TFP), controlling for land quality, rain, transitory shocks. We find that operated size capital are essentially unrelated to TFP, implying substantial misallocation. The output gain a reallocation factors their efficient use among existing farmers is between 1.7- 2.8-fold. provide suggestive evidence connecting misallocation with the extent markets illustrate how an allocation via rental can substantially reduce income inequality poverty. (JEL D24, D31, I32, O13, O15, Q12, Q15)