Improving agricultural economic efficiency in Brazil

In this article, we use Brazilian census data (1995/1996 and 2006) to model agricultural production at the state level in Brazil. Cost‐efficiency measurements are computed using data envelopment analysis techniques, and the response is assessed via fractional regression. We examine the effects of time, geographic region, education, and investment in agricultural research on economic efficiency. We found that investment in agricultural research and regional dummies have a significant effect on efficiency measurements. On average, South and Southeast states are more efficient than other states. An increase in cost efficiency can be accomplished through investment in agricultural research.