Smallholder technical efficiency controlling for environmental production conditions

Smallholder agricultural production depends heavily on environmental production conditions that are largely exogenously determined. Yet, few data sets collect necessary, detailed information on environmental production conditions. This oversight raises the spectre of likely omitted variables bias be...

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Bibliographic Details
Published in:Journal of development economics 2002-10, Vol.69 (1), p.85-101
Main Authors: Sherlund, Shane M., Barrett, Christopher B., Adesina, Akinwumi A.
Format: Article
Language:English
Subjects:
Africa (Sub-Saharan)
Agricultural production
Agricultural productivity
Development economics
Development studies
Economic theory
Environment
Estimation
Production frontiers
Rice
Small-scale farming
Studies
Sub-Saharan Africa
Technical efficiency
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Summary:Smallholder agricultural production depends heavily on environmental production conditions that are largely exogenously determined. Yet, few data sets collect necessary, detailed information on environmental production conditions. This oversight raises the spectre of likely omitted variables bias because farmers' input choices typically respond in part to environmental conditions. Moreover, because environmental production conditions are rarely symmetrically distributed, the omission also generally leads to upward bias in estimated technical inefficiency and to biased estimates of the correlates of estimated technical inefficiency as well. Using panel data from 464 traditional rice plots in Côte d'Ivoire, we show that controlling for heterogeneous environmental production conditions significantly changes inferences, perhaps especially with respect to smallholder rice farmers' estimated technical inefficiency.
ISSN:0304-3878
1872-6089
DOI:10.1016/S0304-3878(02)00054-8