Farms' Technical Inefficiencies in the Presence of Government Programs

We focus on determining the impacts of government programs on farms’ technical inefficiency levels. We use Kumbhakar’s (2002) stochastic frontier model that accounts for both production risks and risk preferences. Our theoretical framework shows that decoupled government transfers are likely to increase (decrease) DARA (IARA) farmers’ production inefficiencies if variable inputs are risk decreasing. However, the impacts of decoupled payments cannot be anticipated if variable inputs are risk increasing. We use farm-level data collected in Kansas to illustrate the model.


Subject(s):
Issue Date:
2007
Publication Type:
Conference Paper/ Presentation
PURL Identifier:
http://purl.umn.edu/9952
Total Pages:
32
Series Statement:
Selected Paper 169120




 Record created 2017-04-01, last modified 2017-08-23

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