Publication

This paper examines a phenomenon where economic models of land allocation may lead to expectations for farmer response that do not materialize if market prices fail to reflect the value of farmers' product. The author explains why the land allocation of such farmers may not respond to market signals even if transaction costs are not binding. She concludes that shadow prices explain land allocation better than market prices and discusses the importance of non-market values in understanding both farmers' supply response and on-farm conservation of traditional crops with non-market values.