Heterogeneous Technology and Panel Data: The Case of the Agricultural Production Function

48 Pages Posted: 20 Apr 2016

See all articles by Yair Mundlak

Yair Mundlak

Hebrew University of Jerusalem - Department of Agricultural Economics and Management

Rita Butzer

University of Chicago - Department of Economics

Donald F. Larson

Institute for the Theory and Practice of International Relations

Date Written: February 1, 2008

Abstract

The paper presents empirical analysis of a panel of countries to estimate an agricultural production function using a measure of capital in agriculture absent from most studies. The authors employ a heterogeneous technology framework where implemented technology is chosen jointly with inputs to interpret information obtained in the empirical analysis of panel data. The paper discusses the scope for replacing country and time effects by observed variables and the limitations of instrumental variables. The empirical results differ from those reported in the literature for cross-country studies, largely in augmenting the role of capital, in combination with productivity gains, as a driver of agricultural growth. The results indicate that total factor productivity increased at an average rate of 3.2 percent, accounting for 59 percent of overall growth. Most of the remaining gains stem from large inflows of fixed capital into agriculture. The results also suggest possible constraints to fertilizer use.

Keywords: Economic Theory & Research, Labor Policies, Economic Growth, E-Business, Rural Development Knowledge & Information Systems

Suggested Citation

Mundlak, Yair and Butzer, Rita Christine and Larson, Donald F., Heterogeneous Technology and Panel Data: The Case of the Agricultural Production Function (February 1, 2008). World Bank Policy Research Working Paper Series, Vol. , pp. -, 2008. Available at SSRN: https://ssrn.com/abstract=1100351

Yair Mundlak

Hebrew University of Jerusalem - Department of Agricultural Economics and Management ( email )

P.O. Box 12
Rehovot, 76100
Israel

Rita Christine Butzer

University of Chicago - Department of Economics ( email )

1126 East 59th Street
Chicago, IL 60637
United States

Donald F. Larson (Contact Author)

Institute for the Theory and Practice of International Relations ( email )

P.O. Box 8795
Williamsburg, VA 23185
United States

HOME PAGE: http://https://sites.google.com/site/decrgdonaldflarson/

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