IDEAS home Printed from
   My bibliography  Save this paper

Aggregate Technical Efficiency and Water Use in U.S. Agriculture


  • Zaeske, Andrew

    () (CERE, Centre for Environmental and Resource Economics)


In the United States freshwater withdrawals for agriculture account for 80% of all out of stream water withdrawals from 1985 to 2005. To assess what drives water use in agriculture, we use the two error stochastic frontier analysis model of Battese and Coelli (1995) to estimate a translog production frontier for agriculture at the state level. The inclusion of non-negative technical inefficiency eff ects allows us to account for additional characteristics in our assessment of production inefficiency. The average marginal value of irrigation is $380, while we fi nd that on average $1 of intermediate inputs provides $0.96 of final output. These results are driven by a small subset of states with large negative values, indicating persistent misallocation of resources. The inefficiency eff ects regression finds that government subsidies increase in value of output of 0:083 per real dollar of subsidies and that that shifts from larger acreage farms to lower acreage ones will generally be efficiency increasing. This analysis highlights di fferences in water use and how they can have major implications for farm policy as a whole. Of particular note is the measured positive correlation between having a negative marginal product of intermediates and having a positive marginal product of irrigation, which suggests that shifts in inputs from intermediates to irrigation are a ripe target for efficiency gains in many states.

Suggested Citation

  • Zaeske, Andrew, 2012. "Aggregate Technical Efficiency and Water Use in U.S. Agriculture," CERE Working Papers 2012:11, CERE - the Center for Environmental and Resource Economics.
  • Handle: RePEc:hhs:slucer:2012_011

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Koop, Gary & Osiewalski, Jacek & Steel, Mark F J, 1999. " The Components of Output Growth: A Stochastic Frontier Analysis," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(4), pages 455-487, November.
    2. Tim Coelli & Sanzidur Rahman & Colin Thirtle, 2003. "A stochastic frontier approach to total factor productivity measurement in Bangladesh crop agriculture, 1961-92," Journal of International Development, John Wiley & Sons, Ltd., vol. 15(3), pages 321-333.
    3. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Basurto Hernandez, Saul & Maddison, David & Banerjee, Anindya, 2018. "The effect of PROCAMPO on farms’ technical efficiency: A Stochastic Frontier Analysis," 2018 Annual Meeting, August 5-7, Washington, D.C. 274376, Agricultural and Applied Economics Association.

    More about this item


    agriculture; water use;

    JEL classification:

    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hhs:slucer:2012_011. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mona Bonta Bergman). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.