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Environmental Indices for the Chinese Grain Sector

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  • Chen, Ming
  • Karp, Larry

Abstract

Increased population pressure and political decisions have led to more intensive agricultural practices in China. As in other regions of the world, these practices can damage natural capital We use the Kalman filter and Chinese panel data to estimate an index of environmental productivity (natural capital), together with the parameters of environmental dynamics and the production function. These estimates show that intensive practices are likely to have had persistent, substantial, and statistically significant negative effects on productivity. Ignoring these effects can cause substantial misallocation of resources. The results illustrate the possibility of estimating sectoral environmental indices using data commonly available.

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Bibliographic Info

Paper provided by Department of Agricultural & Resource Economics, UC Berkeley in its series Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series with number qt20b782tc.

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Date of creation: 01 Sep 2001
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Handle: RePEc:cdl:agrebk:qt20b782tc

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Keywords: Chinese agriculture; dynamic production; environmental indices; sustainability; Kalman filter;

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  1. Golan, Amos & Judge, George & Karp, Larry, 1996. "A maximum entropy approach to estimation and inference in dynamic models or Counting fish in the sea using maximum entropy," Journal of Economic Dynamics and Control, Elsevier, vol. 20(4), pages 559-582, April.
  2. Edward C. Jaenicke & Laura L. Lengnick, 1999. "A Soil-Quality Index and Its Relationship to Efficiency and Productivity Growth Measures: Two Decompositions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, Agricultural and Applied Economics Association, vol. 81(4), pages 881-893.
  3. McMillan, John & Whalley, John & Zhu, Lijing, 1989. "The Impact of China's Economic Reforms on Agricultural Productivity Growth," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 97(4), pages 781-807, August.
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