Investing in agriculture when it is worth it. Empirical evidence from rural Uganda.
, Investing in agriculture when it is worth it. Empirical evidence from rural Uganda., Journal of Development Economics
TypeArticle accepté pour publication ou publié
Nom de la revueJournal of Development Economics
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Résumé (EN)The low level of agricultural productivity in Sub-Saharan Africa is often deemed to be dueto low levels of investment. Yet, why such low investments persist and how to make farmersincrease them is still not clear. Using unique data collected in rural Uganda in 2015 and 2016I show that farmers increase their investment in cattle when their herd value exogenouslyincreases. Based on an instrumental variable approach using the sex of a recently born calf asa source of exogenous variation in cattle value, I find that ten additional dollars in herd valueraises investment in cattle health by 3$, resulting in higher milk production and 20$ higherprofits. These results indicate that farmers do react to the profiability of their activities andmay take investment decisions based on the ’quality’ of their productive assets.
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