Spatial Spillovers on Input‐specific Inefficiency of Dutch Arable Farms

Kevin Schneider*, Ioannis Skevas, A.G.J.M. Oude Lansink

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

3 Citations (Scopus)

Abstract

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 or k‐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.
Original languageEnglish
Pages (from-to)224-243
JournalJournal of Agricultural Economics
Volume72
Issue number1
Early online date5 Sep 2020
DOIs
Publication statusPublished - Feb 2021

Keywords

  • Bootstrap truncated regression
  • crop farms
  • data envelopment analysis
  • input-output efficiency
  • Netherlands
  • spatial econometrics
  • spatial lag in X model

Fingerprint

Dive into the research topics of 'Spatial Spillovers on Input‐specific Inefficiency of Dutch Arable Farms'. Together they form a unique fingerprint.

Cite this