To match, not to matchm how to match: Estimating the farm-level impact of the 2005 CAP-first pillar reform

This paper aims at evaluating the impact of the 2003/2005 CAP reform on farm production choices. The outcome of "market orientation" is measured by considering botht he short-term production choices and the long-term investment decisions. The Treatment Effect (TE) is estimated through two approaches adopting alternative strategies in finding counterfactuals. Different versions of the Propensity Score Matching (PSM) and of the Difference-In-Difference (DID) estimators are preformed, their statistical robustness assessed and results compared. These approahces are applied to a balanced panel of Italian FADN farms observed over years 2003-2007. Results show that the 2003/2005 reform of the first pillar of the CAP actually had an impact more in (re)orienting short-term farm production choices than investment decisions. PSM estimated seem to provide robust empirical evidence despite the difficulties encounter4ed in selecting suitable counterfactuals while the DID approach turns out to be highly dependent on the years chosen to perform the before-after treatment comparison.

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 Record created 2017-04-01, last modified 2017-08-28

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