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Evaluating the Effects of Farm Programs: Results from Propensity Score Matching

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  • Pufahl, Andrea
  • Weiss, Christoph R.

Abstract

The paper applies a non-parametric propensity score matching approach to evaluate the effects of two types of farm programs (agri-environment (AE) programs and the less favoured area (LFA) scheme) on input use and farm output of individual farms in Germany. The analysis reveals a positive and significant treatment effect of the LFA scheme for farm sales and the area under cultivation. Participants in AE schemes are found to significantly increase the area under cultivation (in particular grassland), resulting in a decrease of livestock densities. Furthermore, participation in AE programs significantly reduced the purchase of farm chemicals (fertilizer, pesticide). We also find substantial differences in the treatment effect between individual farms (heterogeneous treatment effects). Farms which can generate the largest benefit from the program are most likely to participate.

Suggested Citation

  • Pufahl, Andrea & Weiss, Christoph R., 2008. "Evaluating the Effects of Farm Programs: Results from Propensity Score Matching," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44149, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaae08:44149
    DOI: 10.22004/ag.econ.44149
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    More about this item

    Keywords

    Agricultural and Food Policy;

    JEL classification:

    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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