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The empirics of decoupling: Alternative estimation approaches of the farm-level production response

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  • Roberto Esposti

Abstract

This article proposes a methodological approach to identify and estimate the farm response to decoupling as a treatment effect. The outcome of ‘market orientation’ is measured by considering both the change of the production mix and the investment decisions. In order to admit different responses across different support levels, the dose–response function is estimated adopting recent alternative continuous-treatment estimators. The application concerns the impact of the 2003/2005 EU Common Agricultural Policy (CAP) reform on the production choices within a balanced sample of Italian farms. Results confirm that farm response varies across support levels and show that the 2003/2005 reform of the first pillar of the CAP actually had a different, and somehow, opposite impact in reorienting farm production choices compared to investment decisions.

Suggested Citation

  • Roberto Esposti, 2017. "The empirics of decoupling: Alternative estimation approaches of the farm-level production response," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 44(3), pages 499-537.
    • Handle: RePEc:oup:erevae:v:44:y:2017:i:3:p:499-537.
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    File URL: http://hdl.handle.net/10.1093/erae/jbw021
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    Citations

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    Cited by:

    1. Zoltán Bakucs & Imre Fertő & Zsófia Benedek, 2019. "Success or Waste of Taxpayer Money? Impact Assessment of Rural Development Programs in Hungary," Sustainability, MDPI, vol. 11(7), pages 1-23, April.
    2. Edoardo Baldoni & Roberto Esposti, 2018. "Agricultural Productivity in Space - An econometric assessment on Italian farm-level data," Working Papers 428, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    3. Kehinde Oluseyi Olagunju & Myles Patton & Siyi Feng, 2020. "Estimating the Impact of Decoupled Payments on Farm Production in Northern Ireland: An Instrumental Variable Fixed Effect Approach," Sustainability, MDPI, vol. 12(8), pages 1-17, April.
    4. Tamru, Seneshaw & Minten, Bart, 2018. "Investing in wet mills and washed coffee in Ethiopia: Benefits and constraints," ESSP working papers 121, International Food Policy Research Institute (IFPRI).
    5. Bartolini, Fabio & Vergamini, Daniele & Longhitano, Davide & Povellato, Andrea, 2021. "Do differential payments for agri-environment schemes affect the environmental benefits? A case study in the North-Eastern Italy," Land Use Policy, Elsevier, vol. 107(C).
    6. Roberto Esposti, 2022. "Non-Monetary Motivations Of Agroenvironmental Policies Adoption. A Causal Forest Approach," Working Papers 459, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    7. Edoardo Baldoni & Roberto Esposti, 2023. "Estimating The Impact Of Policies Under Spatial Interference. The Case Of Cap Support To Organic Farming," Working Papers 475, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    8. Roberto Esposti, 2022. "The Coevolution of Policy Support and Farmers' Behaviour. An investigation on Italian agriculture over the 2008-2019 period," Working Papers 464, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.

    More about this item

    Keywords

    decoupling; treatment effects; dose–response function; farm production choices;
    All these keywords.

    JEL classification:

    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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