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Impacts of Urbanization on Costs of Production and Land Use in the Heartland, Southern Seaboard, and Prairie Gateway: A Farm-Level Analysis

Author

Listed:
  • Nehring, Richard
  • Erickson, Kenneth
  • Harris, Michael
  • Hallahan, Charlie
  • Katchova, Ani

Abstract

This study uses stochastic production frontier (SPF) methods to estimate the impact of urban influence on the cost of production for traditional corn/soybeans farms in the Heartland (excepting Missouri), the Southern Seaboard (excepting Virginia and Alabama) and the Prairie Gateway. We hypothesize that urban influence decreases the technical efficiency of these farms. Although these regions are not entirely subject to urban influence, some parts of these areas are. We find that farmers in urban-influenced locations are less technically efficient than farmers in rural locations in all three regions examined. During 2002-2014, stochastic production frontier procedures indicate that increasing urban influence leads to a significant decrease in technical efficiency. Our statistical analysis clearly bears out the refrain in popular literature that urban proximity raises the cost for, and decreases the viability of, traditional farms.

Suggested Citation

  • Nehring, Richard & Erickson, Kenneth & Harris, Michael & Hallahan, Charlie & Katchova, Ani, 2016. "Impacts of Urbanization on Costs of Production and Land Use in the Heartland, Southern Seaboard, and Prairie Gateway: A Farm-Level Analysis," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235920, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea16:235920
    DOI: 10.22004/ag.econ.235920
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    References listed on IDEAS

    as
    1. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
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    Keywords

    Consumer/Household Economics; Land Economics/Use; Production Economics;
    All these keywords.

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