New crops, local soils and urbanization: Clover, potatoes and the growth of Danish market towns, 1672-1901

How did local soil conditions affect local development historically? Evidence on this question is provided in a new EHES working paper by Torben Dall Schmidt, Peter Sandholt Jensen and Amber Naz from the University of Southern Denmark. 

They investigate how the introduction of clover and potatoes affected market town development. Their strategy is to apply a differences-in-differences type estimation which exploits local variation in suitability for growing these new crops. The authors exploit unique data on adoption of clover whose introduction arguably worked to increase nitrogen supply which is known to govern the yields of crops that have enough water. 

Clover adoption in Denmark in 1775 
Clover adoption in Denmark in 1805 
Note: The measure of spatial distribution of clover adoption was collected on the basis of all 18th manor archives and a number of other sources as detailed by Kjærgaard (1991).

Since clover adoption is most likely endogenous, the authors employ soil suitability for growing alfalfa as an instrumental variable. The reason for this choice is that alfalfa and clover tends to grow well on the same soils, but alfalfa did not have its breakthrough in the period studied mainly due to reasons of climate. To evaluate the impact of the potato, they follow the well-known strategy of Nunn and Qian (Quarterly Journal of Economics, 2011) and use soil suitability for growing potatoes.

The authors find that both clover and potatoes contributed to market town growth with clover contributing roughly 8 percent out of the total growth from 1672 to 1901, whereas potatoes contributed a little in excess of 6 percent.  

The working paper can be downloaded here.  

This blog post was written by Peter Sandholt Jensen, professor in Economics at the University of Southern Denmark.