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Climatic effects and total factor productivity: econometric evidence for Wisconsin dairy farms

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  • Eric Njuki
  • Boris E Bravo-Ureta
  • Víctor E Cabrera

Abstract

This study exploits temporal and cross-sectional variation in weather and long-run climate trends to investigate their effects on farm-level productivity. Using panel data for a sample of Wisconsin dairy producers, three stochastic production frontier models are estimated and a random parameters approach is chosen as the most desirable, which accounts for stochastic observed and unobserved environmental factors. The estimated coefficients are used to decompose a multiplicative total factor productivity index that accounts for different sources of productivity growth. Annual productivity growth is estimated at 2.16 per cent, driven primarily by technical progress (1.91 per cent per annum). The average per year contribution of the other productivity components is: climate adaptation efforts -0.31 per cent; scale-mix efficiency change +0.13 per cent and technical efficiency +0.05 per cent.

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  • Eric Njuki & Boris E Bravo-Ureta & Víctor E Cabrera, 2020. "Climatic effects and total factor productivity: econometric evidence for Wisconsin dairy farms," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 47(3), pages 1276-1301.
    • Handle: RePEc:oup:erevae:v:47:y:2020:i:3:p:1276-1301.
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    3. Hutchins, Jared P. & Gong, Yating & Du, Xiaodong, 2021. "The Role of Animal Breeding in Productivity Growth: Evidence from Wisconsin Dairy Farms," 2021 Annual Meeting, August 1-3, Austin, Texas 313882, Agricultural and Applied Economics Association.
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    6. Hutchins, Jared P. & Nolan, Derek & Skidmore, Marin, 2023. "Extreme Heat and Livestock Production: Costs and Adaptation in the US Dairy Sector," 2023 Annual Meeting, July 23-25, Washington D.C. 335579, Agricultural and Applied Economics Association.
    7. Theodoros Skevas & Ioannis Skevas & Victor E. Cabrera, 2021. "Examining the Relationship between Social Inefficiency and Financial Performance. Evidence from Wisconsin Dairy Farms," Sustainability, MDPI, vol. 13(7), pages 1-14, March.
    8. Sun, Yunpeng & Razzaq, Asif & Kizys, Renatas & Bao, Qun, 2022. "High-speed rail and urban green productivity: The mediating role of climatic conditions in China," Technological Forecasting and Social Change, Elsevier, vol. 185(C).
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    10. Koiry, Subrata & Huang, Wei, 2023. "Do ecological protection approaches affect total factor productivity change of cropland production in Sweden?," Ecological Economics, Elsevier, vol. 209(C).
    11. Chancellor, Will & Hughes, Neal & Zhao, Shiji & Soh, Wei Ying & Valle, Haydn & Boult, Christopher, 2021. "Controlling for the effects of climate on total factor productivity: A case study of Australian farms," Food Policy, Elsevier, vol. 102(C).
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    14. Haseeb Ahmed & Lena-Mari Tamminen & Ulf Emanuelson, 2022. "Temperature, productivity, and heat tolerance: Evidence from Swedish dairy production," Climatic Change, Springer, vol. 175(1), pages 1-18, November.
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