How much Do Decoupled Payments Affect Production? An Instrumental Variable Approach with Panel Data
AbstractHow much decoupled payments, such as direct payments in the U.S., affect agricultural production remains an open empirical question with implications for policy. Using data from multiple years of the Census of Agriculture, we exploit a provision of the 2002 Farm Act that departed from previous policy by making oilseeds eligible for direct payments, thus increasing payments to areas that historically produced more oilseeds. Our instrumental variable estimates, in contrast to OLS estimates, suggest that changes in payments over the period 2002 to 2007 had little effect on aggregate production at the ZIP-code level. Copyright 2012, Oxford University Press.
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Bibliographic InfoArticle provided by Agricultural and Applied Economics Association in its journal American Journal of Agricultural Economics.
Volume (Year): 94 (2012)
Issue (Month): 1 ()
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- Weber, Jeremy G. & Key, Nigel D., 2011. "How Much Do Decoupled Payments Affect Production? An Instrumental Variable Approach with Panel Data," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103455, Agricultural and Applied Economics Association.
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- Rizov, Marian & Pokrivcak, Jan & Ciaian, Pavel, 2013. "CAP Subsidies and the Productivity of EU Farms," Factor Markets Working Papers 148, Centre for European Policy Studies.
- Conor O'Toole & Thia Hennessy, 2013. "Do decoupled payments affect investment financing constraints? Evidence from Irish agriculture," Trinity Economics Papers tep0113, Trinity College Dublin, Department of Economics.
- Marian Rizov & Jan Pokrivcak & Pavel Ciaian, 2013.
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- Moro, Daniele & Sckokai, Paolo, 2013. "The impact of decoupled payments on farm choices: Conceptual and methodological challenges," Food Policy, Elsevier, vol. 41(C), pages 28-38.
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