Off-farm work and technical efficiency of wheat production: An analysis accounting for multiple dimensions of off-farm work

Abstract

This study analyzes the impacts of off-farm work on the technical efficiency (TE) of wheat production, using data collected from 549 farming households in China. Unlike previous studies that only capture one dimension of off-farm work, in this study, we consider multiple dimensions, including off-farm work participation status of household heads, location choices (local or migrated off-farm work), and off-farm work intensity. We employ the stochastic frontier production model to estimate the TE of wheat production and a two-stage residual inclusion (2SRI) approach to address the endogeneity of the off-farm work variables. We find that: (1) household heads’ off-farm work participation significantly increases TE of wheat production; (2) local (rather than migrated) off-farm work participation significantly increases TE; (3) off-farm work intensity significantly increases TE when household heads work off the farm for more than 9 months. Additional analysis reveals that off-farm work participation of household heads, rather than other members, plays a significant role in improving the TE of wheat production.