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U.S. Agriculture, 1960-96: A Multilateral Comparison of Total Factor Productivity

by Eldon Ball, Jean-Pierre Butault, and Richard Nehring

Technical Bulletin No. (TB-1895) 56 pp, May 2001

This study provides estimates of the growth and relative levels of agricultural productivity for the 48 contiguous States for the period 1960 to 1996. For the full 1960-96 period, every State exhibits a positive and generally substantial average annual rate of productivity growth. There is considerable variance, however. The wide disparity in growth rates resulted in substantial changes in the ranking order of States by productivity. For each year, we calculate the coefficient of variation of productivity levels. We use these coefficients to show that the range of levels of productivity has narrowed over time, although the pattern of convergence was far from uniform. The fact that in some States, productivity grew faster than others and yet the cross-section dispersion decreased, implies that the States whose productivity grew most rapidly were those with lower initial levels of productivity. This result is consistent with Gerschenkron’s notion of the advantage of relative backwardness. The States that were particularly far behind the productivity leaders had the most to gain from the diffusion of technical knowledge and proceeded to grow most rapidly. We also observe a positive relation between capital accumulation and productivity growth, implying embodiment of technology in capital.

Keywords: Production accounts, multilateral index numbers, total factor productivity

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Last updated: Wednesday, April 27, 2016

For more information contact: Eldon Ball, Jean-Pierre Butault, and Richard Nehring