CAP subsidies and technical efficiency including environmental outputs: the case of European farms
Résumé
We investigate the effect of Common Agricultural Policy (CAP) subsidies on farms’ technical efficiency when environmental outputs are accounted for. Technical efficiency is calculated with Data Envelopment Analysis (DEA) and Dakpo's (2016) by-production model. The environmental outputs considered in turn are greenhouse gas (GHG) emissions, nitrogen (N) balance, ecological focus areas (EFA). The application is to a sample of European Union's farms. Results indicate that the effect of subsidies on farms’ technical efficiency changes when environmental outputs are included in efficiency calculation.