Do Farm Programs Explain Mean and Variance of Technical Efficiency? Stochastic Frontier Analysis

Past literature has examined the importance of farm programs on the volatility and returns on general and agriculture economic growth. The objective of this study was to assess the impact of farm program payments on technical efficiency. The study used aggregate state level panel data from the U.S agricultural sector. Results indicate production increasing with increasing units of inputs. Results from this study indicate that farm program payments play an important role in technical efficiency. For example, farm program payments indicate a negative and positive effect on mean and variance of technical efficiency in the long-run and short-run, respectively