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Improving Farm Competitiveness through Farm-Investment Support: a Propensity Score Matching Approach

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  • Kirchweger, Stefan
  • Kantelhardt, Jochen

Abstract

The heterogeneity of farms and the problem of self-selection are challenging the evaluation of treatments in agriculture. This is particularly the case for rural development measures whit voluntary participation and heterogeneous outcomes. But knowledge about the selection mechanisms for a certain treatment, in combination with econometric methods, can help to overcome these problems. One of these promising methods is the Propensity Score Matching (PSM) approach. In this paper we apply PSM in order to obtain treatment effects from the agricultural investment support programme in Austria on the farm income. We also test the robustness of the results to hidden bias with sensitivity analysis. Furthermore we split the sample in more homogenous subsamples in order to increase the robustness of the results. The results show that treatment effects differ by a large amount for the subsamples and that splitting leads to slightly more robust results.

Suggested Citation

  • Kirchweger, Stefan & Kantelhardt, Jochen, 2012. "Improving Farm Competitiveness through Farm-Investment Support: a Propensity Score Matching Approach," 131st Seminar, September 18-19, 2012, Prague, Czech Republic 135791, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaa131:135791
    DOI: 10.22004/ag.econ.135791
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    Cited by:

    1. Riccardo D’Alberto & Matteo Zavalloni & Meri Raggi & Davide Viaggi, 2018. "AES Impact Evaluation With Integrated Farm Data: Combining Statistical Matching and Propensity Score Matching," Sustainability, MDPI, vol. 10(11), pages 1-24, November.
    2. Jerzy Michalek & Pavel Ciaian & D'Artis Kancs, 2016. "Investment Crowding Out: Firm-Level Evidence from Northern Germany," Regional Studies, Taylor & Francis Journals, vol. 50(9), pages 1579-1594, September.
    3. Ratinger, T. & Medonos, Tomas & Hruška, M., 2013. "An Assessment of the Differentiated Effects of the Investment Support to Agricultural Modernisation: the Case of the Czech Republic," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 5(4), pages 1-12, December.
    4. Ondřej Dvouletý & Ivana Blažková, 2019. "Assessing the microeconomic effects of public subsidies on the performance of firms in the czech food processing industry: A counterfactual impact evaluation," Agribusiness, John Wiley & Sons, Ltd., vol. 35(3), pages 394-422, July.
    5. Wawrzyniec Czubak & Krzysztof Piotr Pawłowski, 2020. "Sustainable Economic Development of Farms in Central and Eastern European Countries Driven by Pro-investment Mechanisms of the Common Agricultural Policy," Agriculture, MDPI, vol. 10(4), pages 1-19, March.

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    Keywords

    Agribusiness; Agricultural and Food Policy;

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