Crop Insurance Adjusted Panel Data Envelopment Analysis Efficiency Measures

The Swamy-Arora panel data envelopment analysis model is used to estimate crop insurance adjusted efficiency based on an alternative two-way random effect panel estimator. An empirical application using data from 48 U.S. states from 1960 to 2004 indicate the crop insurance adjusted panel model underestimates (overestimates) efficiency in 35 (13) states relative to the pool model. A comparison of efficiency over three time periods--1960 to 1979, 1980 to 1995, and 1996 to 2004--suggests differential trends. The crop insurance adjusted panel model underestimates (overestimates) efficiency in 32 (16) states relative to the model without crop insurance. Copyright 2013, Oxford University Press.