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Abstract

The costs and benefits of policies designed to regulate the use of production contracts will depend in part on the impact of these contracts on farm productivity. In this paper we measure the impact of contracting on 1) partial and total factor productivity and 2) the production technology for 479 US hog operations. A sample selection model accounts for the fact that unobservable variables may be correlated with both the decision to contract and farm productivity. Results also identify determinants of farmers' decisions to contract and factors influencing farm productivity.

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