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Department of Economics, WU (Wirtschaftsuniversität Wien) Working papers, Department of Economics, WU (Wirtschaftsuniversität Wien)

No 113:
Evaluating the effects of farm programs: Results from propensity score matching

Andrea Pufahl () and Christoph Weiss ()

Abstract: The paper applies a non-parametric propensity score matching approach to evaluate the effects of two types of farm programs (agri-environment (AE) programs and the less favoured area (LFA) scheme) on input use and farm output of individual farms in Germany. The analysis reveals a positive and significant treatment effect of the LFA scheme for farm sales and the area under cultivation. Participants in AE schemes are found to significantly increase the area under cultivation (in particular grassland), resulting in a decrease of livestock densities. Furthermore, participation in AE programs significantly reduced the purchase of farm chemicals (fertilizer, pesticide). We also find substantial differences in the treatment effect between individual farms (heterogeneous treatment effects). Farms which can generate the largest benefit from the program are most likely to participate.

JEL-Codes: Q12; Q18; C21; (follow links to similar papers)

November 2007

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