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Subsidies, Endogenous Technical Efficiency and the Measurement of Productivity Growth

Published online by Cambridge University Press:  28 April 2015

Lassaad Lachaal
Lassaad Lachaal*
Affiliation:
Department of Agricultural Economics, University of Missouri-Columbia
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Abstract

The impacts of program subsidy on productivity growth is investigated in this study. Mundlak's concept of endogeneity is applied to technical efficiency and generalized within a dual framework. Technology is described by an aggregate cost function while technical efficiency is conditional on a vector of state variables. Empirical evidence from the U.S. dairy sector supports the hypothesis that protectionism, in the form of program subsidy, is the source of considerable technical inefficiencies.

Keywords

dairy sectorendogenous technical efficiencyproductivity growthsubsidy
Type
Winning Graduate Student Paper
Information
Journal of Agricultural and Applied Economics , Volume 26 , Issue 1 , July 1994 , pp. 299 - 310
Copyright
Copyright © Southern Agricultural Economics Association 1994

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