Quantifying Heterogeneous Returns to Genetic Selection: Evidence from Wisconsin Dairies

24 Pages Posted: 6 Nov 2019 Last revised: 8 Mar 2023

See all articles by Jared Hutchins

Jared Hutchins

University of Wisconsin - Madison

Brent Hueth

University of Wisconsin - Madison - Department of Agricultural & Applied Economics

Guilherme Rosa

University of Wisconsin - Madison

Date Written: November 2019

Abstract

Estimates of productivity growth in the dairy sector attribute as much as half of observed growth to genetic improvement. Unobserved match quality is an important determinate of genetic selection by dairy farmers that confounds attribution to genetic improvement alone. Using data from a large sample of Wisconsin dairy farms, and national-level data on sire rankings, we develop and estimate a model that accounts for selection behavior, and decompose total productivity change into separate effects for genetic improvement and endogenous selection. We find that selection accounts for as much as 75 percent of the total productivity improvement in our sample. Our results provide evidence for positive assortative matching, whereby farmers who adopt above-average yield genetics also perform better than average for their chosen genetics. Further, we find that management behavior accounts for a significant portion of within-herd cow-level heterogeneity, suggesting that dairy farmers manage their herds at the level of individual cows. Overall, our results indicate that a large portion of productivity growth in dairy farming can be explained by farmers’ ability to identify and select genetics well suited to their production environment.

Suggested Citation

Hutchins, Jared and Hueth, Brent and Rosa, Guilherme, Quantifying Heterogeneous Returns to Genetic Selection: Evidence from Wisconsin Dairies (November 2019). NBER Working Paper No. w26417, Available at SSRN: https://ssrn.com/abstract=3480289

Jared Hutchins (Contact Author)

University of Wisconsin - Madison ( email )

716 Langdon Street
Madison, WI 53706-1481
United States

Brent Hueth

University of Wisconsin - Madison - Department of Agricultural & Applied Economics ( email )

427 Lorch St.
Madison, WI 53706-1503
United States

Guilherme Rosa

University of Wisconsin - Madison ( email )

716 Langdon Street
Madison, WI 53706-1481
United States

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