Technical Change, Efficiency, and Total Factor Productivity in U.S. Agriculture

This article examines factors driving technical change, technical efficiency, and scale and mix efficiency – all components of total factor productivity – in U.S. agriculture. We use economic theory and previous literature to identify explanatory variables affecting each component and examine some potentially important factors which have received less attention in the literature. Results show that technical change comes primarily from increased innovation through public research and from improvements in human capital. Technical efficiency is driven by farm size and the ratio of family to total labor, while scale and mix efficiency is driven mainly by agro-climatic conditions, weather, and farm size.