The Role of Land in Temperate and Tropical Agriculture

We document differences in the elasticity of agricultural output with respect to land in temperate and tropical regions. We estimate this elasticity from the relationship of rural labour/land ratios and agroclimatic constraints using global district‐level data. We find that the elasticity in temperate areas (0.285) is higher than in the tropics (0.126), and that this is not an artefact of the level of development. The land elasticity influences the degree of decreasing returns to labour and capital in agriculture, and thus how sensitive living standards are to shocks in productivity and population. Evidence from the postwar mortality transition supports this prediction.