Premium
Does neighborhood matter? Spatial proximity and farmers’ technical efficiency
Author(s) -
Tirkaso Wondmagegn,
Hailu Atakelty
Publication year - 2022
Publication title -
agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.29
H-Index - 82
eISSN - 1574-0862
pISSN - 0169-5150
DOI - 10.1111/agec.12702
Subject(s) - spillover effect , productivity , panel data , production (economics) , spatial econometrics , economics , agricultural productivity , agriculture , econometrics , agricultural economics , exploit , production–possibility frontier , socioeconomic status , frontier , peer effects , spatial dependence , agribusiness , demographic economics , geography , economic growth , statistics , mathematics , computer science , microeconomics , demography , psychology , social psychology , population , computer security , archaeology , sociology
This article examines the effects of neighborhood on the farmer's technical efficiency (TE) level, adopting a stochastic frontier and spatial Durbin regression models. Our study exploits a three‐wave household‐level panel data from the Ethiopian Rural Socioeconomic Survey (ERSS) collected between 2011 and 2015. We find that farmers have an average TE score of 53%, implying a substantial potential for improvement in the production level. We further find that there is a positive and statistically significant spatial interdependence in TE levels between farms in neighboring communities. Input use, education, and other demographic characteristics are found to have significant positive direct and indirect effects. The findings suggest that policies and programs targeting productivity improvements in agriculture need to consider spatial spillover effects.