nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2015‒08‒07
34 papers chosen by

  1. PRODUCTIVITY AND EFFICIENCY OF U.S. MEAT GOAT FARMS By Qushim, Berdikul; Gillespie, Jeffrey; McMillin, Kenneth
  2. A Nonparametric Approach to Multi-product and Product-specific Scale Economies, Economies of Scope, and Cost Efficiency for Kansas Farms By Parman, Bryon; Featherstone, Allen; Amanor-Boadu, Vincent
  3. A Meta-Frontier Approach for Causal Inference in Productivity Analysis: The Effect of Contract Farming on Sunflower Productivity in Tanzania By Henningsen, Arne; Mpeta, Daniel F.; Adem, Anwar S.; Kuzilwa, Joseph A.; Czekaj, Tomasz G.
  4. Water and Farm Efficiency: Insights from the Frontier Literature By Bravo-Ureta, Boris E.; Jara-Rojas, Roberto; Lachaud, Michee A.; Moreira L., Victor H.; Scheierling, Susanne M.
  5. Eficiencia técnica de la invernada en Uruguay: Un análisis de fronteras de producción. By Lanfranco, Bruno; Buffa, Ignacio
  6. Water Productivity in Agriculture: Looking for Water in the Agricultural Productivity and Efficiency Literature By Scheierling, Susanne M.; Treguer, David O.; Booker, James F.
  7. Technical Efficiency Estimation of Rice Production in South Korea By Mohammed, Rezgar; Saghaian, Sayed
  9. On the linkages in U.S. public R&D spending, knowledge capital and agricultural productivity growth: A Bayesian approach By Baldos, Uris Lantz C.; Viens, Frederi G.; Hertel, Thomas W.; Fuglie, Keith O.
  10. Brazil's Agricultural Total Factor Productivity Growth by Farm Size By Helfand, Steven M.; Magalhaes, Marcelo M.; Rada, Nicholas E.
  11. Impact of credit constraints on profitability and productivity in U.S. agriculture By Sabasi, Darlington; Kompaniyets, Lyudmyla
  12. Economic and Financial Determinants of Firm Bankruptcy: Evidence from the French Food Industry By Aleksanyan, Lilia; Huiban, Jean-Pierre
  13. Estimating the Role of Technology in Converting to Organic Dairy Production By Skolrud, Tristan D.
  14. Rice Farmers’ Production Efficiency under Abiotic Stresses: the Case of Bangladesh By Mottaleb, Khandoker; Khanal, Aditya R.; Mishra, Ashok; Mohanty, Samrendu
  15. University Research Productivity and its Impact on the Regional Agricultural Economy: The Case of Colorado State University and the Colorado Economy By Lee, Yoo Hwan; Graff, Gregory D.
  16. A Frontier Analysis of U.S. Poultry Farms: Developing Performance Measures By Nehring, Richard; Katchova, Ani L.; Gillespie, Jeffrey; Hallahan, Charlie; Harris, Michael; Erickson, Ken
  17. The Effect of Gender on Productivity Status in U.S. Agriculture By Harris, J. Michael; Williams, Robert P.; Mishra, Ashok K.
  18. Dynamic Profit Inefficiency: A DEA Application to Belgian Dairy Farms By Ang, Frederic; Oude Lansink, Alfons
  19. The influence of risk-taking on bank efficiency : Evidence from Colombia By Sarmiento, M.; Galán, Jorge E.
  20. Testing for Complementarity: Glyphosate Tolerant Soybeans and Conservation Tillage By Perry, Edward; Moschini, GianCarlo; Hennessy, David A.
  21. A Detailed Analysis of Productivity Trends in the Forest Products Sector in Ontario, 2000-2013: Sunset Industry or Industry in Transition? By Evan Capeluck; Jasmin Thomas
  22. Cost Efficiency of International Corn Production By Hu, Xiangdong; Langemeier, Michael R.; Zimmer, Yelto
  23. Anaerobic Digester Production and Cost Functions By Cowley, Cortney; Brorsen, B. Wade
  24. Adaptation of U.S. Agricultural Production to Drought and Climate Change By Woodard, Joshua D.; Chiu Verteramo, Leslie; Miller, Alyssa P.
  25. Productivity and Exits from Farming in Japan By Ramsey, Ford; Sonoda, Tadashi
  26. Education, Labor Quality and U.S. Agricultural Growth By Wang, Sun Ling; Somwaru, Agapi; Ball, Eldon
  27. Is irrigated farm is more efficient than non-irrigated non-tillage farm and non-irrigated conventional farm for a sample of Kansas corn farmer? By Wibowo, Rulianda P.; Featherstone, Allen M.
  28. Revisiting Quality-Adjusted Price and Quantity Indices for Pesticides By Nehring, Richard F.; Hallahan, Charlie; Fernandez-Cornejo, Jorge; Wang, Sun-Ling; Wechsler, Seth; Hart, Jarrett; Mosheim, Roberto
  29. Effects of restrictions on parameter estimates of US agricultural production By Plastina, Alejandro; Lence, Sergio H.
  30. Duality theory econometrics: How reliable is it with real-world data? By Rosas, Juan Francisco; Lence, Sergio H.
  31. Endogenizing Sustainability in U.S. Corn Production: A Cost Function Analysis By Dong, Fengxia; Mitchell, Paul
  32. Economic Efficiency of Utility Plants Under Renewable Energy Policy By Lynes, Melissa; Featherstone, Allen
  33. Risk, Profitability, and Efficiency in Agricultural Cooperatives under Allocated and Unallocated Equity By Ariyaratne, Chatura B.; Briggeman, Brian C.
  34. An Empirical Structural Model of Productivity and the Conservation Reserve Program Participation By Jang, Heesun; Du, Xiaodong

  1. By: Qushim, Berdikul; Gillespie, Jeffrey; McMillin, Kenneth
    Abstract: This study determines scale and technical efficiencies, productivity, other economic performance measures, and efficiency drivers for U.S. meat goat operations. We estimate an input distance function (IDF) using stochastic production frontier techniques (SPF). Empirical Monte Carlo (MC) simulation techniques are used to show the consistency of small-sample properties for the IDF.
    Keywords: Meat goat, performance measures, scale efficiency, technical efficiency, simulation, Farm Management, Livestock Production/Industries, Production Economics, Productivity Analysis,
    Date: 2014
  2. By: Parman, Bryon; Featherstone, Allen; Amanor-Boadu, Vincent
    Abstract: Nonparametric Productivity Analysis and Efficiency for Kansas Farms
    Keywords: Economies of Scale, Economies of Scope, Multi-product Economies of Scale, Product-specific Economies of Scale, Cost Efficiency, Agribusiness, Crop Production/Industries, Farm Management, Industrial Organization, Production Economics, Productivity Analysis,
    Date: 2014
  3. By: Henningsen, Arne; Mpeta, Daniel F.; Adem, Anwar S.; Kuzilwa, Joseph A.; Czekaj, Tomasz G.
    Abstract: Due to changes in the global agricultural system and support from various organizations, contract farming has recently been significantly expanded in many developing countries. A considerable body of literature analyses the impact of contract farming on the welfare of smallholders, whereas its impact on efficiency and productivity is mostly overlooked. This study addresses this salient gap by combining the approaches suggested by Bravo-Ureta, Greene, and Solís (Empirical Economics 43:55–72, 2012) and Rao, Brümmer, and Qaim (American Journal of Agricultural Economics 94:891–912, 2012). We first use the approach of Bravo-Ureta, Greene and Solís (2012) to estimate two separate production frontiers (one for contract farmers and one for non-contract farmers) that account for potential biases due to self-selection on both observed and unobserved variables. Then, we follow Rao, Brümmer and Qaim (2012) and create a meta-frontier in order to estimate the effects of participation on the farms’ meta-technology ratio, their group technical efficiency, and their meta-technology technical efficiency. The empirical analysis uses a cross-sectional data set from sunflower farmers in Tanzania, where some of the farmers participate in contract farming while others do not. We find a significant selection bias, which justifies the use of the sample selection framework. Our preliminary results indicate that contract farming significantly increases the yield potential (meta-technology ratio) but lowers the group technical efficiency. As the first effect is slightly larger than the second, we find a small positive effect of contract farming on productivity (meta-technology technical efficiency). The positive effects on the yield potential and the (average) productivity can be (at least partly) explained by the contractor’s provision of (additional) extension service and seeds of high-yielding varieties to the contract farmers.
    Keywords: Contract Farming, Sunflower, Technical efficiency, Productivity, Meta-Frontier, Sample selection, Tanzania, International Development, Production Economics, Productivity Analysis, Research Methods/ Statistical Methods, D24, Q12,
    Date: 2015–06
  4. By: Bravo-Ureta, Boris E.; Jara-Rojas, Roberto; Lachaud, Michee A.; Moreira L., Victor H.; Scheierling, Susanne M.
    Keywords: Irrigation Water Use, Technical Efficiency, Agriculture, Meta-­‐Analysis, Agricultural and Food Policy, Productivity Analysis, Research Methods/ Statistical Methods, Q25, Q12, D24,
    Date: 2015–06
  5. By: Lanfranco, Bruno; Buffa, Ignacio
    Abstract: This study evaluated the performance of a group of twenty-seven livestock production enterprises or decision making units (DMU) from fourteen CREA groups located in two contrasting areas of the country, with respect to their input cost efficiency. The study considered a production function with one product (beef) and three input variables (pastures, supplements and health costs). A data envelopment analysis (DEA) was applied the DMUs using average physical and economic information from three years. The DEA is a linear programming technique that enables to identify which DMUs, within a group, are more efficient, as they locate at the empirically estimated production frontier. The results showed that only six DMUs exhibited efficient input/output combinations (100%), three reached a 98% efficient, and one showed an efficiency rate of 92%. The inefficiencies were referred to the spending on supplementation or health. On the lower level, seven DMU showed efficiency levels lower than 60%, with one of them exhibiting an efficiency rate of less than 40%. The absence of linear correlations between the efficiency ratios and the descriptive variables characterizing DMUs, suggest that the differences were due to management factors that are related, in turn, to socio-economic characteristics of producers.
    Keywords: data envelopment analysis, lineal programming, production frontier, Production Economics, Productivity Analysis, C61, D24,
    Date: 2013–11
  6. By: Scheierling, Susanne M.; Treguer, David O.; Booker, James F.
    Abstract: Expectations are that the agricultural sector will have to expand the use of water for irrigation to meet rising food demand, given population and income growth. At the same time, the competition for water resources is growing in many regions. Increasing water productivity in agriculture is widely seen as a critical response to help address these challenges. Yet much of the public debate is vague on the meaning of agricultural water productivity—often emphasizing “more crop per drop” as if water were the only input that mattered—, and approaches for assessing and increasing water productivity are seldom addressed systematically. This paper discusses conceptual issues that should be kept in mind when assessing agricultural water productivity, and presents findings from what may be the first survey of the agricultural productivity and efficiency literature with regard to the explicit inclusion of water aspects in productivity and efficiency measurements. The survey includes studies applying single-factor productivity measures, total factor productivity indices, frontier models, and deductive models. A key finding is that most studies either incorporate field- and basin-level aspects but focus only on a single input (water), or they apply a multi-factor approach but do not tackle the basin-level aspects. It seems that no study on agricultural water productivity has yet presented an approach that accounts for multiple inputs and basin-level issues. However, deductive methods provide the flexibility to overcome some of the limitations of the other methods.
    Keywords: Agricultural water productivity, irrigation efficiency, single-factor productivity, total factor productivity, frontier models, deductive methods, Agricultural and Food Policy, International Development, Productivity Analysis, Resource /Energy Economics and Policy, Q15, Q25, D24,
    Date: 2015
  7. By: Mohammed, Rezgar; Saghaian, Sayed
    Abstract: This paper uses stochastic frontier production function to estimates the technical efficiency of rice production in South Korea. Data from eight provinces have been taken between 1993 and 2012. The purpose of this study is to realize whether the agricultural policy made by the Korean government achieved a high technical efficiency in rice production and also to figure out the variables that could decrease a technical inefficiency in rice production. The study showed there is a possibility to increase the efficiency of production. The effect of location on the production efficiency is significant.
    Keywords: Stochastic Frontier, Rice Production Efficiency, South Korea, Production Economics,
    Date: 2014–02–04
  8. By: Amponsah, Kwabena; Paliwal, Neha
    Keywords: Production, Productivity, Technology Adoption, Technical efficiency, Improved groundnut varieties, propensity score matching, Malawi, Uganda, Sub-Saharan Africa, Agricultural and Food Policy, Crop Production/Industries, Environmental Economics and Policy, Farm Management, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, International Development, Production Economics, Productivity Analysis, Research and Development/Tech Change/Emerging Technologies,
    Date: 2015–07
  9. By: Baldos, Uris Lantz C.; Viens, Frederi G.; Hertel, Thomas W.; Fuglie, Keith O.
    Keywords: Total Factor Productivity, Agricultural R&D Expenditures, Agricultural R&D Stocks, Bayesian Hierarchical Model, Productivity Analysis, Research Methods/ Statistical Methods, Risk and Uncertainty,
    Date: 2015
  10. By: Helfand, Steven M.; Magalhaes, Marcelo M.; Rada, Nicholas E.
    Abstract: The role of farm size has recently come to the forefront of agricultural development debates. Agricultural development policy often focuses on small farms given evidence of their role in poverty reduction and of higher yields. Yet policy has also focused on large farms due to their share of output, efficiency gains from vertical and horizontal integration, and potential employment generation. Brazil offers an interesting case study because of its wide spectrum of farm sizes and the country’s dual agricultural policy focus towards large commercial “agribusiness” enterprises, led by the Ministry of Agriculture, and “family farms,” led by the Ministry of Agrarian Development. Our purpose is to examine the role that farm size may have in Brazil’s agricultural total factor productivity (TFP) growth, which has accelerated at one of the world’s fastest rates over the last twenty years. The data are drawn from the agricultural censuses of 1985, 1995/96, and 2006, aggregated at the municipality level into five farm-size classes. The findings of this study point to heavy technical efficiency losses across all size classes, creating a substantial drag on national agricultural TFP growth. Moreover, because farms in the middle of the size distribution achieved the slowest technical change and TFP growth – bookended by faster growth in the smallest and largest farm-size classes – we identify an unexpected and unexplored source of inefficiency, namely medium-sized farms.
    Keywords: agriculture, Brazil, efficiency change, farm size, technical change, total factor productivity (TFP), Agricultural and Food Policy, International Development, Productivity Analysis,
    Date: 2015
  11. By: Sabasi, Darlington; Kompaniyets, Lyudmyla
    Abstract: This study examines industry-level impacts of possible credit constraints on farm profitability and productivity. We theoretically show that binding credit-constraints negatively affects profits as they inhibit acquisition of the optimal scale and mix of inputs for profit maximization. However, the impact of credit constraints on productivity is ambiguous and depends on the farm’s production region (IRS or DRS). Empirically, current debt-to-asset ratio has a positive effect on TFP and a negative effect on profit.
    Keywords: Agricultural and Food Policy, Agricultural Finance, Production Economics, Productivity Analysis,
    Date: 2015–05–27
  12. By: Aleksanyan, Lilia; Huiban, Jean-Pierre
    Abstract: Despite the strong resilience of the French food industry during the recent economic crisis, the bankruptcy rate for this sector has dramatically increased since 2010. This paper focuses on the economic and financial determinants of firm exit due to bankruptcy in the French food industry and compares them with those for other manufacturing industries. Based on a large sample of firm level data for the period 2001-2012, we show that the bankruptcy risk pattern differs between food industry firms and other manufacturing firms. Firm productivity is an important determinant of a firm's probability of going bankrupt; productivity begins deteriorating 3 years before a failure. Controlling for firm productivity, we also show that credit cost has a positive and significant impact on the probability of bankruptcy. However, firm financing conditions have a lower effect on bankruptcy than productivity.
    Keywords: firm exit, firm bankruptcy, cost of credit, productivity, food industry, Agribusiness, Financial Economics, Industrial Organization, Productivity Analysis, G33, G21, D24,
    Date: 2015
  13. By: Skolrud, Tristan D.
    Keywords: Industrial Organization, Livestock Production/Industries, Production Economics, Productivity Analysis,
    Date: 2015
  14. By: Mottaleb, Khandoker; Khanal, Aditya R.; Mishra, Ashok; Mohanty, Samrendu
    Abstract: More than half of the total extremely poor people in the world live in the major rice producing areas of Asia and Africa; rice is their staple. Enhancement of technical efficiency in producing rice in major rice producing countries of Asia and Africa can have tremendous positive impact on income of farm household, alleviate poverty and improve the livelihoods of millions in these countries. Using Household Income and Expenditure Survey (HIES) data from Bangladesh and stochastic frontier production function estimation approach, we examine the technical efficiency of the rice farmers in Bangladesh. Further, we determine the factors that affect the level of efficiency at the farm level. Results indicate that while drought leads to a significant loss in rice production, floods is a major source of technical inefficiency in rice farming in Bangladesh. We also found that the extent of basic infrastructure can also affect rice production efficiency. Policies are suggested based on the empirical findings.
    Keywords: rice, efficiency, stochastic production function, farm household, drought, submergence, Agricultural and Food Policy, Crop Production/Industries, Food Security and Poverty, Production Economics, Q12, D24,
    Date: 2014–01
  15. By: Lee, Yoo Hwan; Graff, Gregory D.
    Abstract: Selected Poster (#7640): 2015 AAEA & WAEA Joint Meeting at San Francisco July 26-28th.
    Keywords: Knowledge production function, University tech transfer, Invention & innovation, Local economies., Community/Rural/Urban Development, Industrial Organization, Production Economics, Productivity Analysis, Research and Development/Tech Change/Emerging Technologies, Research Methods/ Statistical Methods, O13, O31, O33, O34,
    Date: 2015
  16. By: Nehring, Richard; Katchova, Ani L.; Gillespie, Jeffrey; Hallahan, Charlie; Harris, Michael; Erickson, Ken
    Abstract: Using USDA’s ARMS data for 2006 and 2011, we determine the extent and location of U.S. high and low-technology broiler farms and estimate net returns, scale efficiency, and technical efficiency associated with technology across different operation sizes. Larger-scale high-technology farms generally economically outperformed smaller-scale low-technology farms.
    Keywords: ventilation system, technical efficiency, returns to scale, broiler, Labor and Human Capital, Livestock Production/Industries, Production Economics,
    Date: 2014–01–15
  17. By: Harris, J. Michael; Williams, Robert P.; Mishra, Ashok K.
    Abstract: The role of gender in agriculture has gained considerable attention among policymakers and researchers. According to the 2013 Agricultural Resource Management Survey (ARMS) women served as the principal operator on almost 11 percent of U.S. farms and as a second or third operator on more than 40 percent of farms. Given the importance of women operators in productive agriculture the objective of this report will be to assess the impact of gender on net farm income, total farm output, farming efficiency, production costs, and total household income in the United States. We apply the average treatment approach (ATE) to analyze the impact of operator gender on the income and performance of U.S. farms.
    Keywords: impact of gender, net farm income, total farm output, farming efficiency, production costs, total household income, Average treatment effect (ATE), Agribusiness, Agricultural Finance, Financial Economics, Production Economics, Productivity Analysis, Research Methods/ Statistical Methods,
    Date: 2015
  18. By: Ang, Frederic; Oude Lansink, Alfons
    Abstract: Using a nonparametric framework, we analyze dynamic profit inefficiency for a sample of Belgian, specialized dairy farms from 1996–2008. Profit inefficiency is decomposed into contributions of output, input, and investment. Moreover, we identify the contributions of technical and allocative inefficiency in each input and output. The results suggest substantial profit inefficiency under the current dairy-quota system, mainly driven by an average underproduction of approximately 50 percent and an average underuse of variable inputs of approximately 60 percent, due to allocative inefficiency. Consequently, abolishing the dairy-quota system in 2015 may considerably increase demand for variable inputs and supply of output.
    Keywords: distance function, dynamic efficiency, dairy sector, Agribusiness, Farm Management, D22, D24, D92, Q12,
    Date: 2014–03
  19. By: Sarmiento, M.; Galán, Jorge E.
    Abstract: We present a stochastic frontier model with random inefficiency parameters<br/>which is able to capture the influence of risk-taking on bank efficiency and that<br/>distingues those effects among banks with different characteristics. Cost and profit efficiency are found to be over- and underestimated when risk measures are not accurately modeled. We find that more capitalized banks are more cost and profit efficient, while banks assuming more credit risk are less cost efficient but more profit efficient. The magnitude of these effects vary with bank's size and affiliation. Liquidity is found to affect cost efficiency only for domestic banks. Large and foreign banks benefit more from higher credit and market risk exposures, while small and domestic banks find more advantageous to be more capitalized. We identify some channels that explain these differences and provide insights for macroprudential regulation.
    Keywords: bank efficiency; Bayesian inference; Heterogeneity; random parameters; risk-taking; stochastic frontier models
    JEL: C11 C23 C51 D24 D21 G32
    Date: 2015
  20. By: Perry, Edward; Moschini, GianCarlo; Hennessy, David A.
    Keywords: Complementarity, Conservation Tillage, Discrete Choice, Production Economics, Productivity Analysis,
    Date: 2015–05–27
  21. By: Evan Capeluck; Jasmin Thomas
    Abstract: Ontario’s forest products sector was hit by a near perfect storm in the first decade of the twenty-first century, when a multitude of structural and cyclical factors came together to devastate the sector. Despite this, the Ontario forest products sector has had an above-average productivity performance, driven in particular by the wood product manufacturing subsector. This report provides a detailed analysis of output, input and productivity trends in the Ontario forest products sector. It also looks at the key drivers of productivity in the sector, investigating potential barriers to productivity growth and discussing policies that could enable faster growth. Given the increasing role of countries with low-labour costs in several forest product markets, maintaining robust productivity growth is an imperative for Ontario’s forest products sector if it wants to remain competitive internationally. In this vein, the report recommends a renewed focus on human and physical capital investment, as well as on R&D spending and the introduction of new innovative products.
    Keywords: Productivity, Growth, Forestry, Canada, Research and Development, Capital Intensity, Human Capital, Physical Capital, Wood Product Manufacturing, Paper Manufacturing, Forest Products Sector, Ontario
    JEL: O13 O30 O51 J00 E23 Q20 D24 J08
    Date: 2015–07
  22. By: Hu, Xiangdong; Langemeier, Michael R.; Zimmer, Yelto
    Abstract: The objective of this paper was to examine the cost efficiency of corn production for typical farms involved in the cash crop agri benchmark network. Average cost efficiency for 32 typical farms, representing 12 countries, was 0.720. Seed and direct inputs other than seed, fertilizer, and crop protection inputs, were found to be under-utilized, and labor was found to be over-utilized on the typical farms.
    Keywords: Benchmarking, Corn, Cost Efficiency, Farm Management, D24,
    Date: 2014–02
  23. By: Cowley, Cortney; Brorsen, B. Wade
    Abstract: The USDA recently included anaerobic digesters as one of 10 building blocks in a plan to reduce net carbon dioxide emissions by over 120 million metric tons by 2025. If 500 new anaerobic digesters are to be deployed on farms over the next 10 years, then a better and broader understanding of anaerobic digester economic feasibility is needed. This study uses econometric methods to estimate production and cost functions for anaerobic digesters based on a nationwide survey and then determines net present value (NPV) using the estimated functions. Farm size, digester inputs, and digester design parameters and construction materials could have a significant effect on the productivity and profitability of an anaerobic digester. Economies of size were evident for plug flow and complete mix anaerobic digesters, which were more economically feasible on dairy farms than on swine operations. On dairy farms, economic feasibility could be achieved with co-product marketing, but swine farms required government support to achieve positive NPVs.
    Keywords: anaerobic digestion, production function, cost function, dairy, swine, animal feeding operations, economies of size, Agricultural and Food Policy, Agricultural Finance, Community/Rural/Urban Development, Farm Management, Livestock Production/Industries, D24, Q16, Q42,
    Date: 2015
  24. By: Woodard, Joshua D.; Chiu Verteramo, Leslie; Miller, Alyssa P.
    Keywords: Agribusiness, Agricultural and Food Policy, Agricultural Finance, Farm Management, Food Security and Poverty, Production Economics, Productivity Analysis, Research Methods/ Statistical Methods, Risk and Uncertainty,
    Date: 2015
  25. By: Ramsey, Ford; Sonoda, Tadashi
    Abstract: The farm sector in Japan is subject to significant economic distortions. These distortions, consequences of legislative activity in the 1950's and 1960's, have resulted in a flagging agricultural economy. Total agricultural output has declined significantly over the past three decades and the amount of farmland being abandoned is at record levels. Japan's Prime Minister, Shinzo Abe, has targeted the agricultural sector for structural reform as part of a plan for overall economic growth. The success of reform efforts will ultimately depend on the state of productivity in Japanese agriculture and the factors causing farmers to exit farming. Internal restructuring is critical to intrasectoral growth, but the dynamics of these processes are not well understood. Standard economic models based on the behavior of farm households motivate the use of reduced form statistical modeling. A Bayesian hierarchical model is specified to determine linkages between net farm exits over a period of time and relevant economic and demographic variables. Hierarchical models make it possible to utilize data at both the prefecture and town levels. Because several measures of productivity and market distortion are only available at the prefecture level, this modeling flexibility is especially important. The results of this approach make it possible to assess the factors influencing aggregate entry and exit from the farm sector. Additionally, this study demonstrates the importance of productivity dynamics in understanding the changing compositions of agricultural economies.
    Keywords: japan, occupational migration, exits from farming, productivity, Agricultural and Food Policy, Labor and Human Capital,
    Date: 2015
  26. By: Wang, Sun Ling; Somwaru, Agapi; Ball, Eldon
    Abstract: This study employs a Tὄrnqvist index approach to construct quality-adjusted labor index for the U.S. farm sector using the volume (hours worked) of 192 demographic components and their corresponding cost shares. We decompose labor input change into quality change and quantity change. The results show that between 1948 and 2011 the decline of total hours worked resulted in -0.58 percentage points of output growth per year while increasing labor quality contributed to 0.08 percentage points of annual output growth. We further decompose labor quality change into a change in the educational attainment of the labor force and a change due to other factors. Our results show that the education component contributed to most of the labor quality changes during the study period. However, the contribution of educational attainment is greater in earlier years than in later years.
    Keywords: Tὄrnqvist index, educational attainment, labor quality, labor productivity, U.S. agriculture, Agricultural and Food Policy, Labor and Human Capital, Productivity Analysis, O13, O15, Q10, Q16,
    Date: 2015–05
  27. By: Wibowo, Rulianda P.; Featherstone, Allen M.
    Abstract: The corn farmer has benefited from high corn price. However, the corn price plunged from its high price in 2012 to as low as $ 4.46 per bushel in 2013. The drop in corn price and intense competition from the global grain markets make farms that are non-efficient struggle economically. Pure technical, overall technical, and scale efficiency were measured to analyze the competitiveness of a sample of Kansas corn farmers. The average of pure technical, overall technical, and scale efficiency for irrigated farm, non-irrigated conventional farm and non-irrigated non-tillage farm are below 70%. Farmers increased their efficiency during drought in 2012 and lower corn price. Government payments and insurance expenditure were found to be negatively correlated with efficiency. Farmers should focus on utilizing land and labor more efficiently rather than expanding their size.
    Keywords: Nonparametric efficiency, irrigated corn, non-irrigated corn, Crop Production/Industries, Farm Management, Production Economics,
    Date: 2015–07–26
  28. By: Nehring, Richard F.; Hallahan, Charlie; Fernandez-Cornejo, Jorge; Wang, Sun-Ling; Wechsler, Seth; Hart, Jarrett; Mosheim, Roberto
    Abstract: This study extends previous research, which calculated quality-adjusted price and quantity indices for the pesticides applied to corn, soybeans, cotton, and sorghum using hedonic methods (Fernandez-Cornejo and Jans, 1995). We extend the analysis through 2008 and make several econometric improvements. The analysis proceeds as follows: First, Zivot-Andrews tests are used to determine whether there are structural breaks in the data generating process. Next, we use hedonic regressions to control for pesticide quality characteristics including potency, toxicity, and persistence across active ingredients. Finally, the regression results are used to obtain preliminary estimates of the quality-adjusted price and quantity indices.
    Keywords: Key Words: hedonic estimation, pesticide quality, corn, soybeans, cotton, sorghum, Crop Production/Industries, Environmental Economics and Policy, Productivity Analysis, Research Methods/ Statistical Methods,
    Date: 2015–05–26
  29. By: Plastina, Alejandro; Lence, Sergio H.
    Abstract: The economic theory of producer behavior requires certain conditions to hold in order for a functional form to be representative of a production technology. Agricultural production studies are usually conducted using classical econometrics that do not allow for the imposition of curvature conditions in flexible functional forms. Therefore, some conditions required by economic theory do not hold globally in estimation. Some studies report the proportion of the sample for which curvature conditions do not hold, and the reader is warned about the unknown distorting effects that those data points might have on their final results.Bayesian methods allow for the imposition of first- and second-order restrictions in the estimation of flexible functional forms. We estimate a flexible representation of the US agricultural production technology using Bayesian econometrics under alternative sets of restrictions, and elaborate on the effects of the restrictions on the pdfs of the parameter estimates.
    Keywords: Agricultural production, Bayesian estimation, monotonicity, concavity, flexible functional forms, generalized quadratic, Production Economics, Productivity Analysis, Research Methods/ Statistical Methods, C5, C510, Q1,
    Date: 2015
  30. By: Rosas, Juan Francisco; Lence, Sergio H.
    Abstract: The Neoclassical theory of production establishes a dual relationship between the profit value function of a competitive firm and its underlying production technology. This relationship, commonly referred to as duality theory, has been widely used in empirical work to estimate production parameters without the requirement of explicitly specifying the technology. We analyze the ability of this approach to recover the underlying production parameters. We compute the data generating process by Monte Carlo simulations such that the true technology parameters are known. Employing widely used datasets, we calibrate the data generating process to yield a dataset featuring important characteristics of U.S. agriculture. We compare the estimated production parameters with the true (and known) parameters by means of the identities between the Hessians of the production and profit functions. We conclude that, when the dataset bears minimum sources of noise, duality theory is able to recover the true parameters with reasonable accuracy. Also, that when it is employed in time series coming from an aggregation of technologically heterogeneous firms, the parameters recovered are close to the firm at the median of the distribution. The proposed calibration sets the basis for analyzing the performance of duality theory approaches when datasets used by practitioners are subject to other observed and unobserved sources of noise.
    Keywords: duality theory, firm’s heterogeneity, data aggregation, Monte Carlo simulations, elasticities, Agricultural and Food Policy, Demand and Price Analysis, Production Economics,
    Date: 2015
  31. By: Dong, Fengxia; Mitchell, Paul
    Keywords: Sustainability, cost function, translog, corn, Production Economics,
    Date: 2015
  32. By: Lynes, Melissa; Featherstone, Allen
    Abstract: Over the last two decades a large number of energy policy changes have occurred specifically with regards to renewable energy. This paper considers how these changes in renewable energy policy affect the production efficiencies of power plants that use renewable and/or nonrenewable energy inputs for electricity production. Using nationwide plant level data from 2003 – 2012 pure technical efficiency is estimated. This study considers the efficiencies of both renewable and nonrenewable energy sources. In addition, this study considers how state level renewable energy policies affect the efficiencies of power plants. In general, this study finds that renewable energy policies do not reduce the efficiencies of electricity generation from a technical aspect.
    Keywords: DEA, Electricity Generation, Renewable Energy Policy, Environmental Economics and Policy, Production Economics, D20, L94, Q40, Q48,
    Date: 2015–05
  33. By: Ariyaratne, Chatura B.; Briggeman, Brian C.
    Abstract: Today, more agricultural cooperatives have experienced a surge in their unallocated equity or equity held at the cooperative level as retained earnings. Key factors contributing to this rise are soaring non-member business and various tax deductions available to cooperatives. Many agricultural cooperatives directors and managers are questioning the sustainability of such a change in equity structure. The purpose of this research is to explore how this change in equity structure has impacted agricultural cooperative’s efficiency, profitability, and risk exposure. The study discovered a positive relation between averaged efficiency indices and the allocated equity to total asset ratio and the unallocated equity to total asset ratio. Higher profitability lifted the average allocated equity to total assets ratio as well as the unallocated to total assets ratio. The higher the business risk, the greater the equity cushion that the firm employs. Higher financial risk implies higher borrowing, hence a lower proportion of equity. Furthermore, larger cooperatives can afford to accept a lower level of equity than smaller firms of comparable business risk.
    Keywords: Allocated Equity, Unallocated Equity, Business Risk, Financial Risk, Efficiency, Agribusiness, Agricultural Finance, Industrial Organization, Production Economics,
    Date: 2015–05–26
  34. By: Jang, Heesun; Du, Xiaodong
    Abstract: The Conservation Reserve Program (CRP), which provides financial incentives for landowners to idle erodible and marginal farmland, has contributed to a number of environmental benefits that otherwise would have not been achieved. However in the last few years CRP faced a number of new challenges as record-high crop prices significantly affected landowners’ interests to participate in the program. Despite an extensive literature on CRP, we lack evidence on how landowners react to changes in agricultural market conditions and CRP payment rates and hence how it affects the program enrollment and cost. In this paper, we attempt to investigate landowners’ incentives for CRP participation focusing on the linkage between farmers’ CRP payment bids and unobserved agricultural productivity. We develop and estimate an empirical structural model to examine the manner in which agricultural productivity, market conditions, and CRP payment affect landowners’ land use decisions. A novel identification strategy is employed to control for endogeneity and self-selection. The parameter estimates are used to simulate how changes in agricultural prices and CRP payment influence the program enrollment and cost.
    Keywords: Control function, Land allocation, payment premium, self-selection, Agricultural and Food Policy, Environmental Economics and Policy, Industrial Organization, Land Economics/Use, Productivity Analysis, O13, Q15, Q24,
    Date: 2015

General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.