European Business Schools Librarian's Group

Department of Economics Working Papers,
Vienna University of Economics and Business, Department of Economics

Evaluating the effects of farm programs: Results from propensity score matching

Andrea Pufahl () and Christoph Weiss ()
Additional contact information
Andrea Pufahl: Federal Agricultural Research Center, Institute of Rural Studies, Braunschweig, Germany
Christoph Weiss: Department of Economics, Vienna University of Economics & B.A.

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 November 2007

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