Economic Efficiency of Occupational Health and Safety Investments at Agricultural Cooperatives

Abstract

Industries related to agricultural cooperatives record some of the highest injury rates in the U.S. Therefore, agricultural cooperatives are highly motivated to invest in occupational health and safety (OHS). This thesis examines the economic efficiency of OHS investments at agricultural cooperatives and identifies cooperative characteristics leading to greater economic efficiency of OHS investments. A multiple input-output data envelopment analysis (DEA) is used to estimate technical efficiency. The effects of cooperative characteristics on the efficiency of OHS investments are estimated using ordinary least squares, censored regression, truncated regression, and the Simar and Wilson (2007) bootstrap procedure. Results show that the mean technical efficiency score was 0.833. Furthermore, a cooperative’s annual insurance premia has a significant, negative relationship with technical efficiency. In contrast, the experience levels of a cooperative’s top safety person and top managerial person and a location’s total workers employed have significant, positive relationships with efficiency in all estimated models.