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Pre- and Post- Recession Input Allocation Decisions of Farm Credit System Lending Units

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  • Song, Minrong
  • Escalante, Cesar L.

Abstract

This paper applies the stochastic Translog input distance function and stochastic frontier analysis (SFA) method to evaluate the operational efficiency of lending units within the Farm Credit System (FCS). This study’s model is applied as a comparative analytical frame work to analyze operating strategies and efficiencies of FCS banks versus credit associations (ACA) as well as among various size categories of FCS lending units. This study also adopts an intertemporal perspective by looking at comparative FCS efficiency before and after the most recent financial crisis. The study’s analyses of changes in both technical efficiency (TE) and allocative efficiency (AE) will help FCS make operating adjustments to maximize total factor productivity.

Suggested Citation

  • Song, Minrong & Escalante, Cesar L., 2014. "Pre- and Post- Recession Input Allocation Decisions of Farm Credit System Lending Units," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170080, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea14:170080
    DOI: 10.22004/ag.econ.170080
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    1. Christopher Metli & Kevin J. Stiroh, 2003. "Now and then: the evolution of loan quality for U.S. banks," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 9(Apr).
    2. Cesar Escalante & Minrong Song & Charles Dodson, 2016. "FSA farm loan repayment under economic recession and drought conditions," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 76(4), pages 445-461, November.
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    4. Atkinson, Scott E. & Primont, Daniel, 2002. "Stochastic estimation of firm technology, inefficiency, and productivity growth using shadow cost and distance functions," Journal of Econometrics, Elsevier, vol. 108(2), pages 203-225, June.
    5. Trang Dang & David Leatham & Bruce A. McCarl & Ximing Wu, 2014. "Measuring the efficiency of the Farm Credit System," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 74(1), pages 38-54, April.
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    Keywords

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    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • E39 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Other
    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance

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