Explaining Production Inefficiency in China’s Agriculture using Data Envelope Analysis and Semi-Parametric Bootstrapping
AbstractIn this paper we examine more closely the factors associated with production inefficiency in China’s agriculture. The approach we take involves a two-stage process where output efficiency scores are first estimated using data envelope analysis (DEA), and then in the second stage, variation in the resulting efficiency scores are explained using a truncated regression model with inference based on a semi-parametric bootstrap routine. Among the results we find a heavy industrial presence is associated with reduced agricultural production efficiency and may be an indication that externalities from the industrial process, like air and ground water pollution, affect agricultural production. We also find evidence that counties with a large percentage of the rural labor force engaged in agriculture tend to be less efficient, which suggests that policies to facilitate the removal of labor from agriculture, but not necessarily from the rural areas, would bring about enhanced agricultural efficiency and calls into question policies that promote wholesale migration from rural areas. Sensitivity analysis indicates results are robust to influential observations and outliers.
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Bibliographic InfoPaper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida with number 6456.
Date of creation: 2008
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China's agriculture; DEA; bootstrapping; technical efficiency; Production Economics; C14; Q1; R5;
Find related papers by JEL classification:
- C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
- Q1 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture
- R5 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis
This paper has been announced in the following NEP Reports:
- NEP-AGR-2008-11-18 (Agricultural Economics)
- NEP-ALL-2008-11-18 (All new papers)
- NEP-CNA-2008-11-18 (China)
- NEP-EFF-2008-11-18 (Efficiency & Productivity)
- NEP-TRA-2008-11-18 (Transition Economics)
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