Epsilon Archive for Student Projects

Abstract

The effect of renewable energy expenditure on farm productivity in Sweden was investigated by estimating its association with output-input efficiency at the farm level. An unbalanced panel of microdata from the Swedish Farm Accountancy Data Network (FADN), comprising 6.730 observations from 2008-2023, was used in a log-log Ordinary Least Squares (OLS) regression framework. The relationship was analysed across farm types and size quartiles to account for structural differences. The result showed no statistically significant association between renewable energy expenditure and productivity in the overall sample. However, higher renewable energy costs were significantly negatively associated with productivity among the largest field crop and grazing livestock farms, as well as among the smallest dairy farms. In contrast, smaller field crop and grazing livestock farms exhibited positive but statistically insignificant relationships. No significant association was found for large dairy farms. These findings suggest that both production type and farm size play a crucial role in determining the economic viability of renewable energy investments. The results can inform policy efforts aimed at supporting a fair and efficient transition to clean energy in agriculture.