ARE at AAEA: Matthieu Stigler: Supply response at the field-level: disentangling area and yield effects
July 31, 2018
Time: 4:45–6:15 p.m. Tuesday, Aug. 7
Location: Washington Room 2 / Production Economics - Lightning Session: Production and Supply Change due to Price, Technology, and Policy Shocks
Agricultural price supply response is thought to occur mainly through changes in acreage rather than through yield increase. Many studies find that yields respond weakly to prices, leading to the counter-intuitive idea that yields are insensitive to prices. In this paper, I argue that this result is likely due to the use of aggregated data: county- or state-level yields are averages, whose composition itself is affected by price changes. When area expansion is done by cultivating less fertile fields or by foregoing rotation, this composition effect reduces average yields, even if yields increase on each individual field. To disentangle the effect of the intensive and composition effect on county-level yields, I will run an analysis at the field level, using novel datasets derived from satellite.
*This is information about one of the 17 people from ARE with a presentation at the 2018 AAEA Annual Meeting Aug. 5–7 in Washington, D.C.
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