How population density influences agricultural intensification and productivity: Evidence from Ethiopia

We use household-level panel data to estimate how population density impacts agricultural intensification and farm income in Ethiopia. We hypothesize that increases in population density affect agricultural intensification and farm income directly through information flows, institutional development, and reduction in transactions costs. Increases in population density also affect agricultural intensification and farm income indirectly through farm size, agricultural wage rates, and staple crop prices. We find that increases in population density lead to lower farm sizes, which has major implications for agricultural intensification and household well-being. Our analysis indicates that increases in population density cause farmers to purchase more inorganic fertilizer per hectare. This is due to population density\u27s direct effects on market access. However, we find that population density does not have a statistically significant effect on maize yields, teff yields or farm income per hectare