Agricultural Production Optimization and Marginal Product Response to Climate Change

Dan Liu, Jia You, Rongbo Wang and Haiyan Deng ()
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Dan Liu: College of Finance, Nanjing Agricultural University, No. 1, WeiGang Street, Nanjing 210095, China
Jia You: College of Finance, Nanjing Agricultural University, No. 1, WeiGang Street, Nanjing 210095, China
Rongbo Wang: College of Economics and Management, Nanjing Agricultural University, No. 1, WeiGang Street, Nanjing 210095, China
Haiyan Deng: School of Humanities and Social Sciences, Beijing Institute of Technology, 5 ZhongGuanCunNan Street, Beijing 100081, China

Agriculture, 2022, vol. 12, issue 9, 1-13

Abstract: This study introduces a non-parametric approach to estimate the marginal products of agricultural inputs (agricultural land, labor, machinery, fertilizers and pesticides) in Jiangsu province, China. To study the effects of climate change on these marginal products, we used a fixed-effects regression model. The results show an upward trend of inefficiency in Jiangsu’s agricultural production from 2001 to 2018. The marginal products of agricultural land, labor, machinery, chemical fertilizers and pesticides are 1.54 thousand USD per hectare, 0.32 thousand USD per person, 0.31 thousand USD per kWh, 21.63 thousand USD per ton and 0.88 USD per ton, respectively. Climate change refers mainly to temperature and precipitation, and we analyzed their effects on the marginal products. Temperature has a statistically significant positive effect on the marginal product of fertilizers and machinery, whereas precipitation harms the marginal product of land. Two inputs (i.e., land and fertilizer) are critical driving forces in agricultural production. This study recommends government action to improve agricultural efficiency and ensure climate change adaptation.

Keywords: optimization; marginal product; agricultural input; shadow value; climate change (search for similar items in EconPapers)
JEL-codes: Q1 Q10 Q11 Q12 Q13 Q14 Q15 Q16 Q17 Q18 (search for similar items in EconPapers)
Date: 2022
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