Explaining Production Inefficiency in China’s Agriculture Using Data Envelopment Analysis and Semi-Parametric Bootstrapping

25 Pages Posted: 17 Feb 2010 Last revised: 30 May 2010

See all articles by Daniel Monchuk

Daniel Monchuk

World Bank

Zhuo Adam Chen

University of Georgia; University of Nottingham, Ningbo; University of Chicago

Yosef Bonaparte

University of Colorado at Denver - Department of Finance

Date Written: February 16, 2010

Abstract

In this paper we examine more closely the factors associated with production inefficiency in China’s agriculture. The approach we take involves a two-stage process where output efficiency scores are first estimated using data envelopment analysis, and then in the second stage, variation in the resulting efficiency scores are explained using a truncated regression model with inference-based on a semi-parametric bootstrap routine. Among the results we find a heavy industrial presence is associated with reduced agricultural production efficiency and may be an indication that externalities from the industrial process, such as air and ground water pollution, affect agricultural production. We also find evidence that counties with a large percentage of the rural labor force engaged in agriculture tend to be less efficient, and suggests that nurturing and promoting growth of non-primary agriculture may lead to more efficient use of labor resources in agriculture.

Keywords: DEA, Bootstrapping, Technical Efficiency

JEL Classification: C14, Q1, R5

Suggested Citation

Monchuk, Daniel and Chen, Zhuo and Bonaparte, Yosef, Explaining Production Inefficiency in China’s Agriculture Using Data Envelopment Analysis and Semi-Parametric Bootstrapping (February 16, 2010). China Economic Review, Vol. 21, No. 2, 2010. Available at SSRN: https://ssrn.com/abstract=1554022

Daniel Monchuk

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Zhuo Chen

University of Georgia ( email )

Athens, GA 30602-6254
United States
7065429146 (Phone)

University of Nottingham, Ningbo ( email )

199 Taikang East Road
Ningbo, Zhejiang 315100

University of Chicago ( email )

1101 East 58th Street
Chicago, IL 60637
United States

Yosef Bonaparte (Contact Author)

University of Colorado at Denver - Department of Finance ( email )

United States

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