The Sources of Measured US Agricultural Productivity Growth: Weather, Technological Change, and Adaptation

Abstract

The interaction between US state‐level TFP growth and weather is investigated using growth‐accounting techniques. The focus is on examining how that interaction changed between the 1960s and the end of the twentieth century. An empirical approximation to the production frontier constructed using state‐level data and mathematical programming techniques is used to decompose observed state‐level agricultural TFP growth into four components: technical change, weather‐related shifts in the frontier, input/scale effects, and adaptation to the frontier. Technical change and adaptation to the frontier play a significant role in determining average state total factor productivity. Weather‐related effects differ across Climate‐Hub Regions but are of particular importance in the Midwest.

The Millennium Droughts and Australian Agricultural Productivity Performance: A Nonparametric Analysis

“…Regions with higher soil‐moisture and fewer degree days tend to operate closer to the “best attainable” frontier than regions with drier and hotter conditions. Similar results have been reported by others (Mendelsohn, Nordhaus, and Shaw ; Schlenker and Roberts ; Ortiz‐Bobea, Knippenberg, and Chambers ; Chambers and Pieralli ).…”

“…We used a synthesis of different methods to investigate the interaction between climatic factors and Australian agriculture productivity. To incorporate and isolate weather's impact upon measured productivity performance, we modified Chambers and Pieralli's () method for incorporating climate variates into a yearly productivity setting. Those results allowed us to decompose annual measured productivity growth into four separate components: technological change, input‐scale adjustment, diffusion effects, and weather effects.…”

“…The simultaneous occurrence of the Millennium Droughts and the Australian productivity slowdown defines a natural experiment that facilitates investigating the interaction between extreme climatic conditions and productivity performance. Using techniques developed by Chambers and Pieralli (), we exploit that natural experiment by decomposing measured annual productivity growth into four components (technological change, weather‐related effects, input/scale effects, and technological diffusion) and analyzing how their performance has varied with advent of the Millennium Droughts. As in Chambers and Pieralli (), the analysis recognizes agricultural production's stochastic nature by incorporating measured weather variates directly into the productivity accounting.…”

“…Using techniques developed by Chambers and Pieralli (), we exploit that natural experiment by decomposing measured annual productivity growth into four components (technological change, weather‐related effects, input/scale effects, and technological diffusion) and analyzing how their performance has varied with advent of the Millennium Droughts. As in Chambers and Pieralli (), the analysis recognizes agricultural production's stochastic nature by incorporating measured weather variates directly into the productivity accounting. Unlike Chambers and Pieralli (), who study long‐term changes (over three decades) in productivity performance, we compare the behavior of year‐to‐year productivity growth for a pre‐Millennium‐Droughts period and a Millennium‐Droughts period.…”

“…As in Chambers and Pieralli (), the analysis recognizes agricultural production's stochastic nature by incorporating measured weather variates directly into the productivity accounting. Unlike Chambers and Pieralli (), who study long‐term changes (over three decades) in productivity performance, we compare the behavior of year‐to‐year productivity growth for a pre‐Millennium‐Droughts period and a Millennium‐Droughts period. That allows us to examine how the advent of the extreme weather conditions associated with the Millennium Droughts affected short‐term patterns of agricultural productivity growth.…”