 Inaccurate fertilizer content and its effect on the estimation of production functionsLing Yee Khor and Manfred Zeller China Economic Review, 2014, vol. 30, issue C, 123-132 Abstract: Discrepancy between the labeled content and the real content of fertilizer is a growing problem. It exists in many countries, such as Bangladesh, Cambodia, China, Nigeria, Tanzania, Vietnam, and more. We analyze in our article the effect of low quality fertilizer, which contains less nitrogen than is advertised on the packaging. We show that this could lead to bias in the estimation of production functions. Using panel data from the Hebei Province of China and the Monte Carlo simulation, we examine the magnitude of the bias across different levels of fertilizer quality under various scenarios of uncertainty. We find that ignoring the uncertainty leads to an overestimation of fertilizer's effectiveness. Depending on the scenarios of uncertainty, the bias could even switch the sign of fertilizer's partial elasticity. Keywords: Estimation bias; Low quality fertilizer; Production function; Technical efficiency (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:chieco:v:30:y:2014:i:c:p:123-132 DOI: 10.1016/j.chieco.2014.06.003 Access Statistics for this article China Economic Review is currently edited by B.M. Fleisher, K. X. D. Huang, M.E. Lovely, Y. Wen, X. Zhang and X. Zhu More articles in China Economic Review from Elsevier |
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