Resource information
Although a large literature discusses
the productivity effects of land fragmentation, measurement
and potential endogeneity issues are often overlooked. This
paper uses several measures of fragmentation and controls
for endogeneity and crop choice by looking at inherited
paddy and wheat plots to show that these issues matter
empirically. While crop choice can mitigate effects,
fragmentation as measured by the Simpson index increases
production cost and fosters substitution of labor for
machinery, especially for small and medium farmers. Greater
distances between fragments have a smaller effect. Creating
opportunities for market-based consolidation could be one
step to limit fragmentation-induced cost increases.
