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Land Quality and Agricultural Productivity: A Distance Function Approach

where aLQⁿ is the ratio of the unconstrained and constrained efficiency measures evaluated with
data at time n with respect to the frontier at time m. A similar decomposition is derived in
Jaenicke and Lengnick (1999). In that work, soil quality measures are considered directly as
inputs in the (equivalent) function DU and are used to derive a soil quality index using a process
similar to that described above. In our work, we start with the land quality index as a non-
controllable environmental factor, and seek to measure the impact of differences in the index on
agricultural efficiency.

GLOBAL AGRICULTURAL PRODUCTIVITY

The Data

Inputs and outputs

Data on output and conventional inputs are taken from published and unpublished sources at the
Food and Agriculture Organization (FAO). Data from 1980 to 2003 for 109 countries were used.
The output variable is the value of all agricultural production, measured as the sum of price-
weighted quantities of all agricultural commodities, expressed in international dollars, after
deductions for feed and seed. There are four input variables: agricultural land, represented by
the total agricultural land within a country, i.e. the sum of arable land, permanent cropland, and
permanent pasture; labor, assumed to be the total economically active population in agriculture;
machinery, which refers to the total number of tractors used in agriculture; and fertilizer, which
refers to the total quantity of fertilizer consumed in agriculture calculated as a three-year moving
average.

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