Publication: The role of energy productivity in the U.S. agriculture
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2014-11-19
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Abstract
This paper investigates the role of energy on U.S. agricultural productivity using panel data at the state level for the period 1960-2004. We first provide a historical account of energy use in U.S. agriculture. To do this we rely on the Bennet cost indicator to study how the price and volume components of energy costs have developed over time. We then proceed to analyze the contribution of energy to productivity in U.S. agriculture employing the Bennet-Bowley productivity indicator. An important feature of the Bennet-Bowley indicator is its direct association with the change in (normalized) profits. Thus our study is also able to analyze the link between profitability and productivity in U.S. agriculture. Panel regression estimates indicate that energy prices have a negative effect on profitability in the U.S. agricultural sector. We also find that energy productivity has generally remained below total farm productivity following the 1973-1974 global energy crisis.
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Energy, Bennet-Bowley indicator, Agricultural productivity