Political Violence and Farm Household Efficiency in Colombia

This article estimates farm household levels of technical efficiency and their determinants in Colombia, with particular reference to political violence (i.e., guerrilla fronts, homicides, kidnappings, and forced population displacements). An input‐oriented stochastic frontier is estimated simultaneously with a technical inefficiency model that incorporates an index of political violence at the local level, using survey data from 822 farm households. The findings show that household productivity is lower in areas with high political violence, due mainly to disruptions in rural labor markets and in the operation of large farms. Should political violence be eliminated, the ensuing increases in the Farrell’s technical efficiency indexes of farm households in the sample would increase substantially, pointing to significant peace dividends for rural households in Colombia.