Sources of measured agricultural yield difference
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We decompose yield difference relative to a reference level into components attributable
to (1) efficiency difference, and movements along the frontier due to (2) land quality,
to (3) land size, and to (4) other inputs. The production frontier is built using nonparametric
methods requiring no specification of the functional form of the technology. We
analyze the contributions to yield relative to a reference unit in terms of the quadripartite
decomposition finding that results depend on the choice of the unit of reference. If the
reference unit is chosen to be the mean, land size contributions are found to be negatively
correlated to yield with usual finite moments regression methods. Also nonparamteric
correlation confirms the negative sign of the relationship. If the reference unit is chosen
to be the median instead, land size contributions are found to be negatively correlated to
yield with usual finite moments regression methods. But nonparametric correlation is not
statistically significant because many farmers have no contribution to production difference
from their different land sizes. Integrated squared density difference tests show in
both cases efficiency has a major role in shaping the distribution.