Dairy Farm Efficiency Measurement Using Stochastic Frontiers and Neoclassical Duality

Boris E. Bravo‐Ureta · László Rieger

286 citations0/0 files storedAmerican Journal of Agricultural Economics

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Efficiency Analysis Using DEA Agricultural economics and policies Sustainable Agricultural Systems Analysis

Abstract

Abstract This paper presents a stochastic efficiency decomposition model based on Kopp and Diewert's deterministic methodology. The stochastic model is used to analyze technical, economic, and allocative efficiency for a sample of New England dairy farms. The results suggest that mean economic efficiency for the farmers in the sample is about 70% and that, on average, there is little difference between technical (83.0%) and allocative (84.6%) efficiency. Analyses of the relationship between efficiency and four socioeconomic variables—farm size, education, extension, and experience—reveal that, despite some statistically significant associations, efficiency levels are not markedly affected by these variables.

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References

1977Formulation and estimation of stochastic frontier production function models 1977Efficiency Estimation from Cobb-Douglas Production Functions with Composed Error 1972Efficiency Estimation of Production Functions 1980A survey of frontier production functions and of their relationship to efficiency measurement 1980Maximum likelihood estimation of econometric frontier functions 1966Specification and Estimation of Cobb-Douglas Production Function Models 1979Estimating technical and allocative inefficiency relative to stochastic production and cost frontiers 1974Estimating the Efficiency of Production

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