HEALTH, TECHNICAL EFFICIENCY, AND AGRICULTURAL PRODUCTION IN INDIAN DISTRICTS

We investigate whether better population health may impact economic performance through improvements in technical efficiency in agricultural production. Using district-level data from India, we employ a random-coefficients approach to estimate a Cobb-Douglas production function, computing overall and input-specific technical efficiencies for each district. We then model health (district infant mortality rate) as a determinant of (in)efficiency in a second stage, controlling for a range of other socioeconomic variables. In the preferred specifications, we find that decreases in the infant mortality rate are associated with substantively and statistically significant increases in overall technical efficiency, and that a good portion of this association is likely due to improvements in the efficiency of labor use.