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- Effect of public subsidies on farm technical efficiency: a meta-analysis of empirical results?
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View all notes where the possible input decrease — keeping output the same — is searched for. The main advantages of DEA are that it can handle a multi-output multi-input context, and it does not necessitate specification assumptions.
Agriculture in the Soviet Union
With DEA, the influence of subsidies is commonly investigated in two stages: in the first stage, technical efficiency is computed with DEA and in the second stage, a regression Ordinary Least Squares, truncated, Tobit or quantile is applied to the efficiency scores. In contrast to DEA, SFA relies on econometrics and therefore necessitates specifications regarding the production function and the distribution of error terms see Kumbhakar and Lovell Kumbhakar, S.
Stochastic Frontier Analysis. Cambridge : Cambridge University Press. Rao , C. An Introduction to Efficiency and Productivity Analysis. New York : Springer. Schmidt , 92 — However, one advantage of SFA is that it accounts for potential noise through its double-error term random noise and inefficiency , while in the DEA case, any deviation from the efficient frontier is due to inefficiency. Bayesian methods can be used to provide more accurate inference results, for example accounting for regularity conditions see van den Broeck et al.
Koop , J. Osiewalski , and M. In the SFA case, the computation of efficiency and the effect of subsidies on efficiency are estimated in a single stage.
As mentioned above, different types of data may be used. One possibility is to use cross-sectional data, where farms are observed in one specific year. Panel data can also be used, where the same farms are observed in adjacent years. Some studies investigate the relationship between farm technical efficiency and subsidies in a specific year only, while other studies consider longer periods which, in some instances, enable any change in the way subsidies are allocated to farms to be captured.
Although various levels of observations can be found in the efficiency literature, only studies using individual data, that is to say farm-level data, are found in the literature dealing with the subsidy—efficiency issue suggesting that such level is more appropriate than other levels e.
Regarding subsidies, the subsidization policy depends on the context of the study. However, in general, one can observe that the total value of subsidies received by farms can be decomposed into several components, such as subsidies for implementing investment on the farm or subsidies for production activities. The latter can be disaggregated into several types, such as input subsidies, output subsidies also termed coupled subsidies i.
Regarding coupled and decoupled subsidies, and taking again the example of the EU, over the past decades, the CAP has gradually moved from coupled subsidies to decoupled subsidies. In the mids, partially decoupled payments were introduced in the form of direct payments received per hectare of specific crop planted or per head of specific livestock bred.
Meester , and H. Silvis , — The Netherlands : Wageningen Academic Publishers.
When investigating the relationship between farm technical efficiency and subsidies, the subsidies considered may be given as the total value received by the farm. However, this might capture size effects. Some studies circumvent this issue by relating the subsidies considered to a size variable such as the value of farm revenue, the farm area in hectares or the number of farm livestock units , or by using a share of the considered subsidies in all subsidies received by farms.
A final point to note regarding the methodologies used in the empirical literature on the subsidy—efficiency link relates to the way in which subsidies are modelled. In general, subsidies are used as contextual factors, that is to say as explanatory variables of efficiency e. Zhu and Oude Lansink Zhu, X. Lien , and J. Kumbhakar , and G. In some papers, subsidies are also considered as an additional output to the traditional farm outputs used in the efficiency calculation e. Silva, Arzubi and Berbel Silva, E. Arzubi , and J. Soares , E. Azevedo Santos , — Dordrecht : Springer.
The latter approach can however not accurately account for subsides, since it implies that, for a similar input use, farms receiving subsidies produce more in value than farms not receiving subsidies.
Thus, such an approach does not reflect the real production process of farms. The data used in our meta-analysis consist of observations i.
The studies were collected in March from a systematic review of the existing empirical literature on the links between public subsidies and farm technical efficiency. The literature search was completed by exploring the reference lists of the papers obtained through the search of the databases. One important potential bias in meta-analyses is publication bias, which refers to the fact that studies that are more likely to be submitted and published in journals, as well as cited, are those where results are significant and interesting Coursol and Wagner Coursol, A.
Hedges , — Gavaghan , and M. Sutton , and M. In addition, it has been documented that certain studies remain unpublished because of theoretical or ideological divergences, or conflicts of interest between researchers Sterling Sterling, T. There may also be a relatively long duration of the publishing process. Therefore, meta-analyses based only on literature published in journals may be biased.
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Given this, and as recommended e. Cook et al. Guyatt , G. Ryan , J. Clifton , L. Buckingham , A.
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