CONTRIBUTIONS OF PRODUCTIVITY AND RELATIVE PRICE CHANGES TO FARM LEVEL PROFITABILITY CHANGE

Amin Mugera () and Michael Langemeier

No 150639, 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. from Agricultural and Applied Economics Association

Abstract: This article investigates the sources of profitability and productivity change at the farm level with an application to a group of 252 farms in Kansas over an 18 years period, from 1993 to 2010. The Lowe index method is used to compute changes in total factor productivity (TFP) and terms of trade (TT). Nonparametric data envelopment analysis is used to decompose TFP into technical change and different measures of output oriented efficiency change. Profitability change is mainly driven by TFP change. The main source of TFP change is technical progress. The upward shifting efficiency frontier results in declining technical efficiency. Both profitability and productivity vary by farm size and specialization. Results point for the need to support research and development without ignoring efforts to encourage uptake of existing technologies.

Keywords: Agricultural Finance; Production Economics; Productivity Analysis (search for similar items in EconPapers)
Pages: 28
Date: 2013
New Economics Papers: this item is included in nep-agr and nep-eff
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Related works:
Journal Article: Contributions of Productivity and Relative Price Changes to Farm-level Profitability Change (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea13:150639

DOI: 10.22004/ag.econ.150639

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