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Do Decoupled Payments Stimulate Production? Estimating the Effect on Program Crop Acreage Using Matching

Nigel Key and Michael Roberts ()

No 6072, 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: This study uses matching to evaluate the effect of decoupled payments on the acreage response of Iowa farmers who were in business in 1997 and 2002. Using farm-level panel data from the U.S. Agricultural Census, we examine whether farmers receiving high levels of 1997 agricultural payments per acre had a greater increase in program crop acreage between 1997 and 2002 than farmers receiving low levels of payments. The panel data set allows for conditioning current acreage on past individual acreage and operator characteristics. The large and exhaustive sample allows for comparisons across similar farms. The matching methodology avoids distributional and functional form assumptions about the relationship between the treatment and outcome. Results are consistent with other recent empirical estimates that suggest small but statistically significant effects of decoupled payments on production.

Keywords: Agricultural and Food Policy; Crop Production/Industries; Production Economics (search for similar items in EconPapers)
Pages: 21
Date: 2008
New Economics Papers: this item is included in nep-agr
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea08:6072

DOI: 10.22004/ag.econ.6072

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