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Embodied-Technical Change of Farm Tractors in U.S. Agricultural Productivity Analysis: What Does the Hedonic Price Tell Us?

Author

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  • Wang, Sun Ling
  • Schimmelpfennig, David
  • Ball, Eldon

Abstract

This study employs new data and a hedonic function to estimate the quality-adjusted price and quantity for farm tractors over the 1950-2011 period. The estimated hedonic prices for tractors are lower than the BLS’ tractor price index in most time periods. The lower prices result in a higher estimate of the tractor stock and service flow, which reflects an increase in embodied technical change of farm tractors. After replacing the BLS deflator of tractor investment with these hedonic estimates, average annual TFP growth dropped by 0.13 percentage points over the 1991-2011 period compared with the current USDA’s productivity estimate. These changes can be attributed to the contribution from embodied technical change in farm tractors over this period. The findings show the potential importance of input quality adjustment and can help to explain the sources of productivity growth.

Suggested Citation

  • Wang, Sun Ling & Schimmelpfennig, David & Ball, Eldon, 2013. "Embodied-Technical Change of Farm Tractors in U.S. Agricultural Productivity Analysis: What Does the Hedonic Price Tell Us?," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150198, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaea13:150198
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    File URL: http://purl.umn.edu/150198
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    References listed on IDEAS

    as
    1. Gibbons, M. & Coombs, R. & Saviotti, P. & Stubbs, P. C., 1982. "Innovation and technical change : A case study of the U.K. tractor industry, 1957 1977," Research Policy, Elsevier, vol. 11(5), pages 289-310, October.
    2. V. Eldon Ball & W. A. Lindamood & Richard Nehring & Carlos San Juan Mesonada, 2008. "Capital as a factor of production in OECD agriculture: measurement and data," Applied Economics, Taylor & Francis Journals, vol. 40(10), pages 1253-1277.
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    More about this item

    Keywords

    Hedonic price; farm tractor; total factor productivity (TFP); Productivity Analysis; O3; O4; Q1;

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • Q1 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture

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