Institute at Brown for Environment and SocietyIBES

The Consequences of Fragmentation in Rural India

Andrew Foster

In rural areas of low income countries, spillovers across plot boundaries may lead to the inefficient resource allocation. Economist Andrew Foster explores this phenomenon in rural India.

For instance, if a farmer applies pesticide to his own plot, then some of the pesticide may drift to his neighbors’ plot and thus provide some benefit to that neighbor; conversely, a pesticide may cause pests to shift from a plot on which pesticide is applied to a neighboring plot and thus impose a cost on that neighbor. Using a unique five year panel data of two villages in India, Andrew Foster has found that spillovers are indeed present in these areas, and that they are on average negative.

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