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Heterogeneous technology and panel data : the case of the agricultural production function

Author

Listed:
  • Mundlak, Yair
  • Butzer, Rita
  • Larson, Donald F.

Abstract

The paper presents empirical analysis of a panel of countries to estimate an agricultural production function using a measure of capital in agriculture absent from most studies. The authors employ a heterogeneous technology framework where implemented technology is chosen jointly with inputs to interpret information obtained in the empirical analysis of panel data. The paper discusses the scope for replacing country and time effects by observed variables and the limitations of instrumental variables. The empirical results differ from those reported in the literature for cross-country studies, largely in augmenting the role of capital, in combination with productivity gains, as a driver of agricultural growth. The results indicate that total factor productivity increased at an average rate of 3.2 percent, accounting for 59 percent of overall growth. Most of the remaining gains stem from large inflows of fixed capital into agriculture. The results also suggest possible constraints to fertilizer use.

Suggested Citation

  • Mundlak, Yair & Butzer, Rita & Larson, Donald F., 2008. "Heterogeneous technology and panel data : the case of the agricultural production function," Policy Research Working Paper Series 4536, The World Bank.
  • Handle: RePEc:wbk:wbrwps:4536
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    References listed on IDEAS

    as
    1. Fulginiti, Lilyan E & Perrin, Richard K, 1993. "Prices and Productivity in Agriculture," The Review of Economics and Statistics, MIT Press, pages 471-482.
    2. Hausman, Jerry A & Taylor, William E, 1981. "Panel Data and Unobservable Individual Effects," Econometrica, Econometric Society, vol. 49(6), pages 1377-1398, November.
    3. Durlauf, Steven N. & Johnson, Paul A. & Temple, Jonathan R.W., 2005. "Growth Econometrics," Handbook of Economic Growth,in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 8, pages 555-677 Elsevier.
    4. Ackerberg, Daniel & Lanier Benkard, C. & Berry, Steven & Pakes, Ariel, 2007. "Econometric Tools for Analyzing Market Outcomes," Handbook of Econometrics,in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 6, chapter 63 Elsevier.
    5. Barro, Robert J & Lee, Jong-Wha, 2001. "International Data on Educational Attainment: Updates and Implications," Oxford Economic Papers, Oxford University Press, pages 541-563.
    6. Larson, David F. & Butzer, Rita & Mundlak, Yair & Crego, Al, 2000. "A Cross-Country Database for Sector Investment and Capital," World Bank Economic Review, World Bank Group, pages 371-391.
    7. Yair Mundlak, 1961. "Empirical Production Function Free of Management Bias," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 43(1), pages 44-56.
    8. Binswanger, Hans & Yang, Maw-Cheng & Bowers, Alan & Mundlak, Yair, 1987. "On the determinants of cross-country aggregate agricultural supply," Journal of Econometrics, Elsevier, vol. 36(1-2), pages 111-131.
    9. Fan Hu & John M. Antle, 1993. "Agricultural Policy and Productivity: International Evidence," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 15(3), pages 495-505.
    10. Mundlak, Yair & Larson, Don & Butzer, Ritz, 1997. "The determinants of agricultural production : a cross-country analysis," Policy Research Working Paper Series 1827, The World Bank.
    11. Olley, G Steven & Pakes, Ariel, 1996. "The Dynamics of Productivity in the Telecommunications Equipment Industry," Econometrica, Econometric Society, pages 1263-1297.
    12. Evenson, Robert E & Kislev, Yoav, 1975. " Investment in Agricultural Research and Extension: A Survey of International Data," Economic Development and Cultural Change, University of Chicago Press, vol. 23(3), pages 507-521, April.
    13. Barbara J. Craig & Philip G. Pardey & Johannes Roseboom, 1997. "International Productivity Patterns: Accounting for Input Quality, Infrastructure, and Research," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(4), pages 1064-1076.
    14. Yair Mundlak & René Hellinghausen, 1982. "The Intercountry Agricultural Production Function: Another View," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 64(4), pages 664-672.
    15. repec:adr:anecst:y:1999:i:55-56:p:19 is not listed on IDEAS
    16. Mundlak, Yair, 2001. "Production and supply," Handbook of Agricultural Economics,in: B. L. Gardner & G. C. Rausser (ed.), Handbook of Agricultural Economics, edition 1, volume 1, chapter 1, pages 3-85 Elsevier.
    17. V. Eldon Ball & Jean-Pierre Butault & Carlos San Juan Mesonada, 2004. "Measuring Real Capital Input in OECD Agriculture," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 52(3), pages 351-370, November.
    18. Antle, John M, 1983. "Infrastructure and Aggregate Agricultural Productivity: International Evidence," Economic Development and Cultural Change, University of Chicago Press, vol. 31(3), pages 609-619, April.
    19. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," Review of Economic Studies, Oxford University Press, vol. 70(2), pages 317-341.
    20. Yair Mundlak & Donald Larson & Rita Butzer, 2004. "Agricultural dynamics in Thailand, Indonesia and the Philippines," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, pages 95-126.
    21. Mundlak, Yair, 1993. "On the Empirical Aspects of Economic Growth Theory," American Economic Review, American Economic Association, vol. 83(2), pages 415-420, May.
    22. Lau, Lawrence J. & Yotopoulos, Pan A., 1989. "The meta-production function approach to technological change in world agriculture," Journal of Development Economics, Elsevier, vol. 31(2), pages 241-269, October.
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    24. repec:adr:anecst:y:1999:i:55-56 is not listed on IDEAS
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    More about this item

    Keywords

    Economic Theory&Research; Labor Policies; Economic Growth; E-Business; Rural Development Knowledge&Information Systems;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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