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The Impact of Extension Services on Farm Level Outcomes: An Instrumental Variable Approach

Author

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  • Cawley, A.P
  • Heanue, K.
  • O’Donoghue, C.
  • Sheehan, M.

Abstract

Many studies show that interaction with extension services impact farmer’s technology adoption decisions and profitability levels. However, analysis of extension impact across all farm systems whilst controlling for endogeneity biases is less common. This research attempts to redress that research gap by firstly discussing the various biases related to the motivation to engage with extension services, omitted variable bias and measurement error, and subsequently applying instrumental variable (IV) regression estimation to the relationship between extension engagement and farm level outcomes, namely family farm income over a pooled panel dataset. Distance to the local advisory office and the introduction of a policy change were chosen as valid and relevant instruments. The results indicate a positive impact of extension engagement on farm income, and imply that an ordinary least squares approach underestimates the benefits of extension engagement. Accordingly, increased advisory activity could improve the performance of the sector significantly, and this could be a useful policy tool to achieve the targets as set out by the Irish governments Food Wise 2025 plan.

Suggested Citation

  • Cawley, A.P & Heanue, K. & O’Donoghue, C. & Sheehan, M., 2015. "The Impact of Extension Services on Farm Level Outcomes: An Instrumental Variable Approach," 150th Seminar, October 22-23, 2015, Edinburgh, Scotland 212664, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaa150:212664
    DOI: 10.22004/ag.econ.212664
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    References listed on IDEAS

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    Cited by:

    1. Brennan, Noreen & Ryan, Mary & Hennessy, Thia & Cullen, Paula & Dillon, Emma, 2016. "Going beyond FADN: The use of additional data to gain insights into extension service use across European Union Member States," Studies in Agricultural Economics, Research Institute for Agricultural Economics, vol. 118(3), pages 1-9, December.
    2. Upton, V. & Ryan, M. & Heanue, K. & Ní Dhubháin, Á., 2019. "The role of extension and forest characteristics in understanding the management decisions of new forest owners in Ireland," Forest Policy and Economics, Elsevier, vol. 99(C), pages 77-82.
    3. Richard Sebaggala & Fred Matovu, 2020. "Effects of Agricultural Extension Services on Farm Productivity in Uganda," Working Papers 379, African Economic Research Consortium, Research Department.
    4. Kassem, Hazem S. & Alotaibi, Bader Alhafi & Muddassir, Muhammad & Herab, Ahmed, 2021. "Factors influencing farmers’ satisfaction with the quality of agricultural extension services," Evaluation and Program Planning, Elsevier, vol. 85(C).
    5. Zhijie Guan & Jim Kwee Fat Ip Ping Sheong, 2020. "Determinants of bilateral trade between China and Africa: a gravity model approach," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 47(5), pages 1015-1038, April.

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