Impact of public subsidies on farm technical efficiency: a Bayesian meta-analysis

In this paper, we contribute to the literature studying the link between public subsidies and farm technical efficiency. We provide a meta-analysis and a metaregression analysis of the empirical literature, where the observed effect sizes and their heterogeneity were modeled and investigated using the empirical Bayes metaanalytical framework. Our investigation confirms the generally-found negative effect of subsidies on farm technical efficiency, suggesting that public subsidies distort farmers’ incentive to produce efficiently. The empirical Bayes estimate of the overall effect size indicates that a 1% point increase in the subsidy share in farm income leads to a 1.87% decrease in the technical efficiency. Results from the metaregression analysis reveal that the overall effect is robust to the production sub-sector and the area considered, and the method used (DEA or else)