Climate change, health care access and regional influence on components of U.S. agricultural productivity

This article examines factors driving three components of total factor productivity change (TFPC) in U.S. agriculture – technical change (TC), technical efficiency change (TEC), and scale and mix efficiency change (SMEC). We also examine TFPC and contrast implications derived from the component models with those from a directly estimated TFPC model. Our results show that TC and SMEC are both significantly impacted by innovation through public research and improved human capital through education and health care access. TEC and SMEC are significantly affected by farm size, and the latter is significantly affected by public policy. The ratio of family-to-total labour, terms of trade and precipitation have significant impacts on all three components, but extension has no significant impact on any component. Climate change variables are the most impactful factors on each component as well as on TFPC. While the impact of climate change is heterogeneous across regions and components, its estimated historical impact is most often positive. Nearly all TFPC elasticities estimated directly are qualitatively the same as those calculated from the component models and quantitatively similar.