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Effect of subsidies on technical efficiency excluding or including environmental outputs: An illustration with a sample of farms in the European Union

Author

Listed:
  • Latruffe, Laure
  • Dakpo, K Hervé
  • Desjeux, Yann
  • Justinia Hanitravelo, Giffona
Abstract
With a sample of farms in the European Union (EU) and Farm Accountancy Data Network (FADN) data completed by additional data, we illustrate how the effect of farm subsidies on technical efficiency changes when environmental (good or bad) outputs are incorporated in the calculation of technical efficiency. Results indicate that the effect of the Common Agricultural Policy (CAP) operational subsidies on farm technical efficiency changes when environmental outputs (in this study: greenhouse gas emissions, nitrogen balance and ecological focus areas) are taken into account in the efficiency calculation: some effects change significance, and more importantly, some effects change sign.

Suggested Citation

  • Latruffe, Laure & Dakpo, K Hervé & Desjeux, Yann & Justinia Hanitravelo, Giffona, 2017. "Effect of subsidies on technical efficiency excluding or including environmental outputs: An illustration with a sample of farms in the European Union," Working Papers 266259, Institut National de la recherche Agronomique (INRA), Departement Sciences Sociales, Agriculture et Alimentation, Espace et Environnement (SAE2).
  • Handle: RePEc:ags:inrasl:266259
    DOI: 10.22004/ag.econ.266259
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    References listed on IDEAS

    as
    1. Lansink, Alfons Oude & Reinhard, Stijn, 2004. "Investigating technical efficiency and potential technological change in Dutch pig farming," Agricultural Systems, Elsevier, vol. 79(3), pages 353-367, March.
    2. Laure Latruffe & Yann Desjeux & Zoltán Bakucs & Imre Fertő & József Fogarasi, 2013. "Environmental Pressures and Technical Efficiency of Pig Farms in Hungary," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 34(6), pages 409-416, September.
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    4. Dakpo, K Hervé & Latruffe, Laure, 2016. "Agri-environmental subsidies and French suckler cow farms’ technical efficiency accounting for GHGs," Working Papers 245192, Institut National de la recherche Agronomique (INRA), Departement Sciences Sociales, Agriculture et Alimentation, Espace et Environnement (SAE2).
    5. Minviel, Jean Joseph & De Witte, Kristof, 2017. "The influence of public subsidies on farm technical efficiency: A robust conditional nonparametric approach," European Journal of Operational Research, Elsevier, vol. 259(3), pages 1112-1120.
    6. Dakpo, K Hervé, 2016. "On modeling pollution-generating technologies: a new formulation of the by-production approach," Working Papers 245191, Institut National de la recherche Agronomique (INRA), Departement Sciences Sociales, Agriculture et Alimentation, Espace et Environnement (SAE2).
    7. Jean Joseph Minviel & Laure Latruffe, 2017. "Effect of public subsidies on farm technical efficiency: a meta-analysis of empirical results," Applied Economics, Taylor & Francis Journals, vol. 49(2), pages 213-226, January.
    8. Martin, John P & Page, John M, Jr, 1983. "The Impact of Subsidies on X-Efficiency in LDC Industry: Theory and an Empirical Test," The Review of Economics and Statistics, MIT Press, vol. 65(4), pages 608-617, November.
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    14. Jeanneaux, Philippe & Latruffe, Laure, 2016. "Modelling pollution-generating technologies in performance benchmarking: Recent developments, limits and future prospects in the nonparametric frameworkAuthor-Name: Dakpo, K. Hervé," European Journal of Operational Research, Elsevier, vol. 250(2), pages 347-359.
    15. K Hervé Dakpo & Philippe Jeanneaux & Laure Latruffe, 2017. "Greenhouse gas emissions and efficiency in French sheep meat farming: A non-parametric framework of pollution-adjusted technologies," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 44(1), pages 33-65.
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    More about this item

    Keywords

    Agricultural and Food Policy; Environmental Economics and Policy; Farm Management;
    All these keywords.

    JEL classification:

    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling

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