The paper shows that if the performance of hired farmhands is affected by supervision from family members, and if the availability of credit is dependent on the amount of land owned, then a systematic (positive or negative) relationship between per-acre yields and farm size will prevail. A model with no supervision effects on labor productivity would predict that yields are unaffected by farm size. The paper also investigates the relation between land utilization and owned holding size when land rental possibilities are limited. Results are shown to be compatible with various observed patterns in LDCs.
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The views expressed in this paper are the author's; they do not represent those of the World Bank or its affiliated institutions. The author is indebted to two anonymous referees for valuable suggestions.
Copyright © 1985 Published by Elsevier B.V.