Impact of Information on Technical Efficiency of Agricultural Production in India
BASE University Working Paper Series: 14/2022
This paper tries to estimate the impact of information use on technical efficiency of agricultural production in India using propensity score matching method. The study utilises cross-sectional data from the 70th Round of NSSO on Situation Assessment Survey of Farmers (2012-13). Technical efficiency is calculated using a novel technique by Cherchye, et.al. (2013) that acknowledges the presence of multiple outputs, output-specific inputs and joint inputs in the data. The results of propensity score matching method show that users of information have a slightly higher efficiency than non-users but the impacts vary largely across different sources of information. The findings hint at a source effect working at large that tends to dampen the true effect of information. Using information from private sources has the largest impact while media has a smaller impact. Public sources don’t show a statistically significant impact, may be due to constraints like lack of infrastructure, manpower and monitoring. Nevertheless, it does not undermine their importance but suggests that they might work through indirect channels that require further exploration.
Keywords: Agriculture, Information Use, Technical Efficiency, Data Envelopment Analysis, Propensity Score Matching
JEL Classification: D24, Q12, Q16