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The influence of public subsidies on farm technical efficiency: A robust conditional nonparametric approach

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  • Jean Joseph Minviel
  • Kristof De Witte

Abstract

The objective of this paper is to assess the impact of public subsidies on farm technical efficiency using recent advances in nonparametric efficiency analysis. To this end, we use robust conditional frontier techniques as well as insights from recent developments in nonparametric econometrics. The paper contributes to the ongoing methodological discussion on how to model the effect of public subsidies on farmers’ production decisions. The analysis is conducted using an unbalanced panel data of 1,604 observations from 313 French farms located in the French region Meuse over the period 2006-2011. The estimates indicate that public subsidies influence negatively the conditional technical efficiency of farms. This suggests that public subsidies affect the range of attainable values for the inputs and outputs, and hence the shape of the boundary of the attainable set, as well as the distribution of inefficiencies inside the attainable set.

Suggested Citation

  • Jean Joseph Minviel & Kristof De Witte, 2016. "The influence of public subsidies on farm technical efficiency: A robust conditional nonparametric approach," Working Papers SMART 16-10, INRAE UMR SMART.
    • Handle: RePEc:rae:wpaper:201610
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    More about this item

    Keywords

    data envelopment analysis; conditional efficiency; nonparametric econometrics; public subsidies; farms;
    All these keywords.

    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
    • C54 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Quantitative Policy Modeling
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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