Abstract
In the United States freshwater withdrawals for agriculture account for 80% of all out of stream water withdrawals from 1985 to 2005. To assess what drives water use in agriculture, we use the two error stochastic frontier analysis model of Battese and Coelli (1995) to estimate a translog production frontier for agriculture at the state level. The inclusion of non-negative technical ineciency eects allows us to account for additional characteristics in our assessment of production ineciency. The average marginal value of irrigation is $380, while we nd that on average $1 of intermediate inputs provides $0.96 of nal output. These results are driven by a small subset of states with large negative values, indicating persistent misallocation of resources. The ineciency eects regression nds
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