The Pick of the Crop: Agricultural Practices and Clustered Networks in Village Economies

This paper studies how social networks (might fail to) shape agricultural practices. We exploit (1) a unique census of agricultural production nested within delineated land parcels and (2) social network data within four repopulated villages of rural Vietnam. In the first step, we extract exogenous variation in network formation from home locations within the few streets that compose each village (populated through staggered population resettlement), and we estimate the return to social links in the adoption of highly productive crops. We find a large network multiplier in apparent contradiction with low adoption rates. In the second step, we study the structure of network formation to explain this puzzle: Social networks display large homophily, and valuable links between heterogeneous households are rare. Due to the clustered nature of networks and the dynamic, endogenous propagation of agricultural practices, there are decreasing returns to social links, and policies targeting “inbetweeners” are most able to mitigate this issue.