Land Productivity and Plot Size : Is Measurement Error Driving the Inverse Relationship?

This paper revisits the decades-old puzzle of the inverse plot-size productivity relationship, which states that land productivity decreases as plot size increases. Existing empirical studies on the inverse plot-size productivity relationship define land productivity or yields as self-reported production divided by plot size. This paper considers an alternative approach to estimating yields based on crop cuts. The crop-cut method entails measuring and harvesting randomly selected subplots by trained technicians, and is recommended by the Food and Agriculture Organization for the accurate measurement of crop production. Using data representative of rural Ethiopia, the analysis indicates that the inverse relationship is strong when based on self-reported production, but disappears when based on crop-cut estimates. The inference from these findings is that the inverse relationship is an artifact of systematic overreporting of production by farmers on small plots, and underreporting on larger plots. The paper also discusses how rejecting the inverse plot-size productivity relationship has significant implications for the inverse farm-size productivity relationship