Impacts of Urbanization on Costs of Production and Land Use in the Heartland, Southern Seaboard, and Prairie Gateway: A Farm-Level Analysis

Richard Nehring, Kenneth Erickson, Michael Harris, Charlie Hallahan and Ani Katchova

No 235920, 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts from Agricultural and Applied Economics Association

Abstract: This study uses stochastic production frontier (SPF) methods to estimate the impact of urban influence on the cost of production for traditional corn/soybeans farms in the Heartland (excepting Missouri), the Southern Seaboard (excepting Virginia and Alabama) and the Prairie Gateway. We hypothesize that urban influence decreases the technical efficiency of these farms. Although these regions are not entirely subject to urban influence, some parts of these areas are. We find that farmers in urban-influenced locations are less technically efficient than farmers in rural locations in all three regions examined. During 2002-2014, stochastic production frontier procedures indicate that increasing urban influence leads to a significant decrease in technical efficiency. Our statistical analysis clearly bears out the refrain in popular literature that urban proximity raises the cost for, and decreases the viability of, traditional farms.

Keywords: Consumer/Household Economics; Land Economics/Use; Production Economics (search for similar items in EconPapers)
Pages: 30
Date: 2016
New Economics Papers: this item is included in nep-agr and nep-eff
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea16:235920

DOI: 10.22004/ag.econ.235920

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