The Return to Capital in Ghana

Santosh Anagol
Christopher Udry
Publication Type: 
Papers
Journal Name: 
American Economic Review Papers and Proceedings
Journal Volume: 
96
Journal Number: 
2
Pages: 
388-393
Publication Year: 
2006

We show that the real return to capital in Ghana’s informal sector is high. For farmers, we find annual returns ranging from 205-350% in the new technology of pineapple cultivation, and 30-50% in well-established food crop cultivation. We also examine the relative prices of durable goods of varying durability, and estimate a lower bound to the opportunity cost of capital of 60%.

JEL Codes: 
O12, O16 , D24
Region: 
Africa (Sub-Sahara)
Country: 
Ghana
Topic: 
Enterprise
Topic: 
Agriculture