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Few sectors of the economy have increased their productivity as rapidly as agriculture. Productivity is defined as output per unit input. &quot;Total...

Few sectors of the economy have increased their productivity as rapidly as agriculture. Productivity is defined as output per unit input. “Total factor productivity” (TFP) takes all inputs (labor, capital, fuels, and so on) into account. Table 10.6 gives the total factor productivity of U.S. farms from 1948 to 1994. The entries are index numbers. That is, they give each year’s TFP as a percent of value for 1948. Your assignment is to describe in some detail how U.S. farm productivity has increased A) Plot TFP against year. It appears that around 1980 the rate of increase in TFP changed. How is this apparent from the plot? What was the nature of the change? B) Regress TFP on year using only the data for the years 1948 to 1980. Add the least-squares line to your scatterplot. The line makes the finding in (a) clearer. C) Give a 95% confidence interval for the annual rate of change in TFP during the period 1948 to 1980. D) Regress TFP on year for the years 1981 to 1994. Add this line to your plot. Give a 95% confidence interval for the annual rate of improvement in TFP during those years. E) Write a brief paragraph on trends in U.S. farms productivity since 1948, making use of your analysis in parts (a) to (d) Year TFP Year TFP Year TFP Year TFP 1948 100 1961 120 1974 143 1987 205 1949 95 1962 121 1975 155 1988 193 1950 94 1963 124 1976 152 1989 212 1951 98 1964 125 1977 164 1990 219 1952 100 1965 129 1978 158 1991 218 1953 102 1966 128 1979 164 1992 235 1954 106 1967 134 1980 156 1993 220 1955 104 1968 138 1981 175 1994 245
1956 106 1969 139 1982 180 1957 106 1970 138 1983 162 1958 111 1971 149 1984 184 1959 111 1972 151 1985 197 1960 114 1973 143 1986 199

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