Spatial spillovers on input-specific inefficiency of Dutch arable farms
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Lansink, Alfons Oude
John Wiley & Sons Ltd.
Traditional benchmarking implicitly assumes that decision making units operate in isolation from their peers. For arable production systems in particular, this assumption is unlikely to hold in reality. This paper quantifies spatial spillovers on input-specific inefficiency using data envelopment analysis and a second-stage bootstrap truncated regression model. The bootstrap algorithm is extended to allow for the estimation of the parameter of the spatial weight matrix, which captures the proximity between producers. The empirical application concerns Dutch arable farms for which latitudes and longitudes are available. The average inefficiency across years was 3.87% for productive inputs and 2.98% for damage abatement inputs under variable returns to scale. For productive inputs technical inefficiency, statistically significant spillover effects from neighbours' age and their degree of specialisation depended on the type of the spatial weight matrix used (inverse distance ork-nearest neighbours). Statistically significant spillover effects of subsidy payments were adverse while statistically significant spillover effects from insurance payments were beneficial. For damage abatement inputs technical inefficiency, statistically significant adverse effects were found for neighbours' age and subsidy payments and beneficial effects from neighbours' insurance payments and their degree of specialisation.
Bootstrap truncated regression , Crop farms , Data envelopment analysis , Netherlands , Spatial econometrics , Spatial lag in X model , Input-output efficiency
Schneider, K., Skevas, I. and Lansink, A. O. (2020) 'Spatial spillovers on input-specific inefficiency of Dutch arable farms', Journal of Agricultural Economics. doi: 10.1111/1477-9552.12400
© 2020, the Authors. Journal of Agricultural Economics published by John Wiley & Sons Ltd on behalf of Agricultural Economics Society. This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited.