Geography and the Determinants of Land Distribution: Evidence from the United States
32 Pages Posted: 17 Oct 2006
Date Written: October 16, 2006
While the adverse impacts of land inequality have often been documented, the origins of this inequality are less commonly discussed. One hypothesis, most recently associated with the work of Engerman and Sokoloff, holds that the type of crops available for production dictated the initial land distribution within economies. However, this hypothesis has not received careful empirical attention and the possibility that land distributions influence the type of crops produced makes causal inference difficult. This paper uses county level data from the 1860 Agricultural Census of the United States to identify the causal role of crop type on land distribution. Identification is obtained by using several county level geographic variables as instruments for the type of crops planted within a county. The results show that the percentage of output made up of cash crops (cotton, sugar, and tobacco) was highly significant in determining land inequality across U.S. counties in 1860. Geography, acting indirectly through its influence on crop type, had a significant impact on land inequality. This supports the general hypothesis that geography affects economic development indirectly through institutions. However, it provides a much more specific example of the role of geography in development than previously identified.
Keywords: Land distribution, Inequality, Crop Choice, Geography, Institutions
JEL Classification: O13, N51, Q15
Suggested Citation: Suggested Citation