Campus Units

Economics

Document Type

Presentation

Conference

2020 Agricultural & Applied Economics Association Annual Meeting

Publication Version

Submitted Manuscript

Publication Date

2020

Conference Title

2020 Agricultural & Applied Economics Association Annual Meeting

Conference Date

July 26-28, 2020

City

Kansas City, MO

Abstract

In this paper, we use data envelopment analysis and a panel of Iowa farms to evaluate profit inefficiency in corn and soybean production. We find that farms have, on average, profit inefficiency scores of 89.4% in combined corn and soybean production, suggesting that profit could be increased by 89.4% if farms eliminated technical and allocative inefficiencies. Overall, profit efficiency improved from 2011 to 2018, a period generally characterized by decreasing farm net worth. Moreover, while factors such as farm size and operator age affect technical inefficiency, these variables do not have a significant effect on profit inefficiency, while farms’ net worth per acre and crop insurance indemnity payments positively affect profit inefficiency. Land tenure does not have a significant effect on technical or profit inefficiency.

JEL Classification

Q12, D22, D24

Comments

This is a Selected Paper prepared for presentation at the 2020 Agricultural & Applied Economics Association Annual Meeting, Kansas City, MO July 26-28, 2020.

Rights

Copyright 2020 by Sawadgo and Plastina. All rights reserved. Readers may make verbatim copies of this document for non-commercial purposes by any means, provided that this copyright notice appears on all such copies.

Copyright Owner

The Authors

Language

en

File Format

application/pdf

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