A new spin on an old debate: Errors in farmer-reported production and their implications for inverse scale - Productivity relationship in Uganda

Abstract

Based on a two-round household panel survey conducted in Eastern Uganda, this study shows that the analysis of the inverse scale-productivity relationship (IR) is highly sensitive to how plot-level maize production is measured. While farmer-reported production-based plot-level maize yield regressions consistently lend support to the IR, the comparable regressions estimated with maize yields based on sub-plot crop cutting, full-plot crop cutting, and remote sensing point towards constant returns to scale, at the mean as well as throughout the distributions. In deriving the much-debated coefficient for GPS-based plot area, the maize yield regressions control for objective measures of soil fertility and edge effects at the plot-level, as well as time-invariant household- and parcel-level unobserved heterogeneity in select specifications. The core finding appears to be driven by over-estimation of farmer-reported maize production vis-à-vis their crop cutting-based counterparts, particularly in the lower half of the plot area distribution.