Total Factor Productivity as a Measure of Weak Sustainability
Analysis of agricultural production generally ignores the undesirable outputs (such as soil erosion) that are jointly produced with desirable, marketable outputs. In this paper we present preliminary TFP results incorporating national level data for off-site damage costs of soil erosion for broad acre agriculture between 1953 and 1994. Following the approach introduced by Repetto et al. (1996), our revised TFP estimates provide interesting results. When we assume that damage costs per ton of soil erosion are constant, our TFP estimates are higher than estimates omitting the undesirable output. This result can be explained by the fact that the rate of soil erosion grew more slowly than output increased, or the rate of soil erosion declined and agricultural output remained constant. Defining weak sustainability (i.e., allowing substitution between natural and human capital) as non-declining TFP, our results indicate that Australian broad acre agriculture is sustainable. Note our results are only preliminary because there are other externalities that we do not include in the analysis and the existing soil erosion damage cost data is very weak.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Fare, R. & Grosskopf, S. & Pasurka, C., 1986. "Effects on relative efficiency in electric power generation due to environmental controls," Resources and Energy, Elsevier, vol. 8(2), pages 167-184, June.
- Frank M. Gollop & Gregory P. Swinand, 1998. "From Total Factor to Total Resource Productivity: An Application to Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(3), pages 577-583.
- Fischer, Stanley, 1988. "Symposium on the Slowdown in Productivity Growth," Journal of Economic Perspectives, American Economic Association, vol. 2(4), pages 3-7, Fall.
- Lawrence, Denis & McKay, Lloyd, 1980. "Inputs, Outputs And Productivity Change In The Australian Sheep Industry," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 24(01), April.
- Denis Lawrence & Lloyd McKay, 1980. "Inputs, Outputs And Productivity Change In The Australian Sheep Industry," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 24(1), pages 46-59, April.
- V. Kerry Smith, 1998. "Should Pollution Reductions Count as Productivity Gains for Agriculture?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(3), pages 591-594.
- Barbera, Anthony J. & McConnell, Virginia D., 1990. "The impact of environmental regulations on industry productivity: Direct and indirect effects," Journal of Environmental Economics and Management, Elsevier, vol. 18(1), pages 50-65, January.
- Pittman, Russell W, 1983. "Multilateral Productivity Comparisons with Undesirable Outputs," Economic Journal, Royal Economic Society, vol. 93(372), pages 883-891, December.
- Gollop, Frank M & Roberts, Mark J, 1983. "Environmental Regulations and Productivity Growth: The Case of Fossil-Fueled Electric Power Generation," Journal of Political Economy, University of Chicago Press, vol. 91(4), pages 654-674, August.
When requesting a correction, please mention this item's handle: RePEc:trb:wpaper:2001.03. 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: (Stephen Scoglio)
If references are entirely missing, you can add them using this form.