Regional analysis of specific costs in agricultural production: using the Wasserstein distance

Abstract

In the context of the forthcoming reform of the Common Agricultural Policy, analysing agricultural production costs  is a crucial step in developing fair pricing policies, particularly at regional level, to avoid potential distortions of competition. This article presents the application of Wasserstein distance-based statistical techniques to the regional analysis of specific costs  in agricultural production. Taking into account the heterogeneity and asymmetry of the distributions, it combines the conditional quantile estimation methodology with those based on the Wasserstein distance (factorial analysis of the distance matrix, unsupervised divisive classification, quadratic test). The procedure is applied to the comparative regional analysis of the distributions of specific fertiliser costs  for crop production, based on the European Agricultural Accounting Network, at the level of the European basic regions (NUTS2). The results obtained for specific input costs and associated margins appear consistent with those of previous work carried out under the European Union’s 7th Framework Programme for Research.