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--- input_allocation [2020/02/25 09:35] – [Input allocation for fertilisers and nutrient balances] matsz
+++ input_allocation [2020/02/25 09:43] – [Input allocation for labour] matsz
@@ Line 780: / Line 780: @@
 For more details on the factors used see Panagos et al. (2015).
+==== Input allocation for labour ====
+Labour (and other inputs) in CAPRI are estimated from a Farm Accounting Data Network (FADN) sample ((More details on the FADN estimation were reported older versions of this section (originally drafted by Markus Kempen and Eoghan Garvey) the CAPRI documentation, accessible in the \doc folder of any stable release of the CAPRI system up to star 2.4 from [[https://www.capri-model.org/dokuwiki/doku.php?id=capri:get-capri.]])) and then these estimation results are combined with total labour requirements within a region (or aggregate national input demand reported in the EAA), using a Highest Posterior Density (HPD) estimation framework.
+===Labour Input Allocation===
+Input coefficients (family labour and paid labour, both in hours, as well as wage regressions for paid labour) were estimated using standard econometrics from single farm records as found in FADN. While many of results from this process are plausible a number of CAPRI estimates of labour input are inaccurate and untrustworthy, not least when fitted values for labour using the econometric coefficients are compared with total regional labour inputs recoverable from FADN data survey weights. To remedy this, a reconciliation process is undertaken to correct figures for labour input by adjusting the labour input coefficients for both total labour and family labour, handled in file gams\inputs\labour_calc.gms.
+The reconciliation process has two components. The first component is to fix on a set of plausible estimates for the labour input coefficients (based on the econometric results) while the second involves a final reconciliation, where further adjustments are made to bring the estimates into line with the FADN values for labour inputs. Implementing these two steps involves the following procedures.
+Step one involves preparing the econometric estimates in order to remove unreliable entries. This process removes specific unsuitable estimates for particular regions and crop types. In addition, this process also involves adjusting certain agricultural activities labour input coefficients (such as the estimates for triticale) so as to bring them into line with similar activities (such as for soft wheat). Furthermore, a Bayesian probability density function is used where EU averages are used as priors, and a number of bounds are added, in order to generate realistic labour input coefficients.
+While the procedure described above help to ensure plausible estimates, the labour input values generated will still not be such as to reconcile total fitted labour with total actual labour at a regional or national level (as estimated by FADN). Step 2 in this process is to implement a final reconciliation, where the labour input coefficients are adjusted in order to bring estimates of labour input closer to the total labour used in the region/country. However, this adjustment process has to be balanced with a recognition that many of the labour input coefficient estimates are relatively reliable and that we don’t need or want to radically adjust all of them. Therefore the final reconciliation has to specify which input coefficients have to be adjusted most.  The main way in which this is achieved is through the consideration of the coefficients’ standard errors in a second Bayesian posterior density function.
+As well as the reconciliation process, two other procedures have to be carried out. The first results from the fact that a number of activities don’t have labour input coefficient estimates. In order to estimate them, the revenue shares for the relevant activities are used as a proxy for the amount of labour they require.  Labour input for the different activities is then calculated based on these shares. The second procedure is due to the presence of infeasibilities in this model. In order to try and eliminate them, a number of courses of action can be followed from excluding outlying estimates to dropping regional estimates.