Technological Change in U.S. Agriculture: The Aggregation Problem

This paper asks the question: To what extent did the aggregate nature of previous studies of technological change determine their results of major efficiency increase, little of which is explained by capital increase? Past literature offers little help in measuring the effect of aggregation. One viable approach is contained in the two questions: Will the technological change index be biased by aggregation? Is aggregation covering significant variation? These questions are answered for U.S. agriculture at four levels of aggregation from 12 counties in the Corn Belt to the entire agricultural sector. Domar presented a theoretical solution to the bias question, and the present evidence supports the conclusion that little bias is involved in the aggregation.