Agricultural Productivity in New Zealand: First Estimates from the Longitudinal Business Database

47 Pages Posted: 16 Sep 2015

See all articles by Eyal Apatov

Eyal Apatov

Oranga Tamariki Ministry for Children; Motu Economic and Public Policy Research Trust; Ministry of Business, Innovation & Employment

Richard Fabling

Motu Economic and Public Policy Research Trust

Adam B. Jaffe

Brandeis University; Motu Economic and Public Policy Research; National Bureau of Economic Research (NBER)

Michele Morris

Independent

Matt Thirkettle

Cornell University - Department of Economics

Date Written: September 14, 2015

Abstract

Exports of dairy and sheep/beef products account for over 40% of New Zealand's aggregate merchandise exports. As a consequence, the performance of farms in these industries has a significant impact on the New Zealand economy. In this study, we link financial and agricultural data from the New Zealand Longitudinal Business Database (LBD) to estimate production functions of dairy and sheep/beef firms in New Zealand. Overall, we find that the data enables us to explain much of the industry-level variation in productivity and output, offering greater flexibility and insight than simply examining the official (aggregated) statistics. We find that variation in output can be largely explained by variation in capital, labour, intermediate expenditure, and productive land. We also find differences across industries in the way various farm practices (e.g. stocking rates, fertilizer use, supplementary activities, etc.) and area characteristics (including weather) relate to output. Finally, we find that estimating firm productivity at the industry level is less likely to accurately model the relationships for some sub-groups of firms (e.g. firms with different land size). We believe that our methodology could be useful for future studies addressing research questions relevant to this sector.

Keywords: Firm-level productivity, dairying, sheep-beef farming, Translog, fixed effects

JEL Classification: D22, Q12, R30

Suggested Citation

Apatov, Eyal and Fabling, Richard Blaikie and Jaffe, Adam B. and Morris, Michele and Thirkettle, Matt, Agricultural Productivity in New Zealand: First Estimates from the Longitudinal Business Database (September 14, 2015). Available at SSRN: https://ssrn.com/abstract=2660522 or http://dx.doi.org/10.2139/ssrn.2660522

Eyal Apatov (Contact Author)

Oranga Tamariki Ministry for Children ( email )

56 the terrace
PO Box 5488
Wellington 6011
New Zealand

Motu Economic and Public Policy Research Trust ( email )

Level 1, 93 Cuba Street
P.O. Box 24390
Wellington, 6142
New Zealand

Ministry of Business, Innovation & Employment ( email )

15 Stout Street
Wellington, PO Box 147
New Zealand
0800209020 (Phone)

HOME PAGE: http://https://www.mbie.govt.nz/

Richard Blaikie Fabling

Motu Economic and Public Policy Research Trust ( email )

Level 1, 93 Cuba Street
P.O. Box 24390
Wellington, 6142
New Zealand

Adam B. Jaffe

Brandeis University ( email )

Waltham, MA 02454-9110
United States
781-736-2251 (Phone)
781-736-2263 (Fax)

HOME PAGE: http://www.brandeis.edu/global/people/faculty/jaff

Motu Economic and Public Policy Research ( email )

Level 1, 93 Cuba Street
P.O. Box 24390
Wellington, 6142
New Zealand

HOME PAGE: http://motu.org.nz

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Michele Morris

Independent ( email )

Matt Thirkettle

Cornell University - Department of Economics ( email )

414 Uris Hall
Ithaca, NY 14853-7601
United States

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