Health, Technical Efficiency and Agricultural Production in Indian Districts

Abstract:     
We attempt to quantify the effect of improved population health on technical efficiency in agricultural production. Using data from over 260 districts in 15 Indian states, we employ a random-coefficients approach to estimate a Cobb-Douglas production function, computing overall and input specific technical efficiencies for each district. We then model health (here, the district infant mortality rate) as a determinant of (in)efficiency in a second stage, controlling for a range of other socioeconomic variables. We find that decreases in the infant mortality rate, as well as increases in the literacy rate and level of irrigation, are associated with significant increases in overall technical efficiency, and that a good portion of health’s effect is probably due to improvements in the efficiency of labor use. While efficiency increases from improvements in irrigation are larger, the potential gains from health are still fairly substantial.

Keywords: population health, agricultural production, India, technical efficiency

JEL Classifications: I10, O13, Q01

Working Paper Series