Organization, Performance, and System Choice: East European Agricultural Development by Michael L Boyd

Author:Michael L Boyd [Boyd, Michael L]
Language: eng
Format: epub
Tags: International Relations, Political Science, General
ISBN: 9781000236835
Google: 8mMPEAAAQBAJ
Goodreads: 49572695
Publisher: Routledge
Published: 2019-06-04T00:00:00+00:00

3. The Production Function Framework and Data

As in the Yugoslav and Polish case studies, its examining Bulgarian agricultural performance I want to identify separately the effects of policy, environment, and organization on performance in order to be able to examine the factors underlying the changes in productivities described in the previous section. The main goal of analysis in this case is to establish in what directions and to what extent the reform policies of the 1970s and 1980s have affected performance. To carry out this investigation I use an aggregate production function analysis similar to that employed in the previous two case studies. As in those cases, I work with a Cobb-Douglas aggregate production function, but this time without entertaining differentiation in functional form between different groups of producers, because the focus of this case study is on the performance of Bulgarian state farms over the years from 1960 to 1985.8 Nevertheless, because of the identification of different organizational patterns for state farms in the three policy periods described above, I estimate the function so as to consider the possible sources of performance differentials arising from changes in policy.

I specify the aggregate production function for Bulgarian agriculture as a modified version of equation 3.3, in particular:

5.1

where x is the natural logarithm of gross output;

A° is the intercept in the base region in the initial year (1960);

dr the regional dummy variable (one for observations on region r, zero elsewhere; these regions are made up of groups of okrugs, described below);

dt is the policy (time) dummy variable (year for observations in subperiod t, zero elsewhere);

zi is the natural logarithm of the ith input (in this case including labor, land, livestock, and machinery);

g is the okrug (county), the basic regional observational unit;

T is the year, the basic temporal observational unit; and

u is the error term.

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