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Library THE EFFECT OF SOIL CONSERVATION ON TECHNICAL EFFICIENCY: EVIDENCE FROM CENTRAL AMERICA

THE EFFECT OF SOIL CONSERVATION ON TECHNICAL EFFICIENCY: EVIDENCE FROM CENTRAL AMERICA

THE EFFECT OF SOIL CONSERVATION ON TECHNICAL EFFICIENCY: EVIDENCE FROM CENTRAL AMERICA

Resource information

Date of publication
December 2006
Resource Language
ISBN / Resource ID
AGRIS:US2016216902

This study evaluates technical efficiency (TE) levels for rural households under high and low levels of investments in soil conservation in El Salvador and Honduras. To correct for potential self-selectivity bias a household-level switching regression framework is implemented to estimate separate stochastic production frontiers for the two groups of households under analysis. The main results indicate that a systematic difference exists between the two studied groups. Specifically, households with higher levels of investments in soil conservation show higher average TE than those with a lower level of investments. Constrains in the rural land and credit markets appear to be the reason behind these differences. Our estimations indicate that for farms with lower levels of investments in soil conservation access to credit is a significant factor explaining the sources of inefficiency. Conversely, households with higher levels of investments in soil conservation present the highest partial output elasticity for land, the highest levels of TE and the smallest farms. This result could suggest the presence of a market failure in the land market which is denying access to land to the more efficient producers.

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Authors and Publishers

Author(s), editor(s), contributor(s)

Solis, Daniel
Bravo-Ureta, Boris E.
Quiroga, Ricardo E.

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Geographical focus