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- Title
How much Do Decoupled Payments Affect Production? An Instrumental Variable Approach with Panel Data.
- Authors
Weber, Jeremy G.; Key, Nigel
- Abstract
How much decoupled payments, such as direct payments in the U.S., affect agricultural production remains an open empirical question with implications for policy. Using data from multiple years of the Census of Agriculture, we exploit a provision of the 2002 Farm Act that departed from previous policy by making oilseeds eligible for direct payments, thus increasing payments to areas that historically produced more oilseeds. Our instrumental variable estimates, in contrast to OLS estimates, suggest that changes in payments over the period 2002 to 2007 had little effect on aggregate production at the ZIP-code level.
- Subjects
UNITED States; AGRICULTURAL productivity; AGRICULTURAL economics; AGRICULTURAL laws; OILSEEDS; ESTIMATION theory
- Publication
American Journal of Agricultural Economics, 2012, Vol 94, Issue 1, p52
- ISSN
0002-9092
- Publication type
Article
- DOI
10.1093/ajae/aar134