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Activity Analysis: Bridging the Gap between Production Economics Theory and Practical Farm Management Procedures


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  • Longworth, John W.
  • Menz, Kenneth M.
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    This paper is addressed to the traditional problem of demonstrating the relevance of production theory to management-oriented people. Activity analysis, it is argued, is the most appropriate pedagogic framework within which to commence either a production economics or a farm management course. Production economics theory has not been widely accepted as a useful method for the analysis of practical management problems. The theory has been traditionally presented in terms of continuous functions which assume away the question of technical efficiency. Activity analysis, in its general form, is a more comprehensive approach to the theory of production than the conventional neo-classical production function approach since activity analysis explicitly incorporates technical efficiency considerations. The failure of general agricultural economists to demonstrate appropriately the relevance of production theory has encouraged a sub-discipline of farm management dedicated to real-world management problems in agriculture. The basic procedures developed by the farm management sub-discipline (virtually independent of production theory) and now in common use, have a strong affinity with activity analysis. The traditional gap between production theory and applied farm management can, therefore, be bridged by approaching the theory from the activity analysis viewpoint.

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    Bibliographic Info

    Article provided by Australian Agricultural and Resource Economics Society in its journal Review of Marketing and Agricultural Economics.

    Volume (Year): 48 (1980)
    Issue (Month): 01 (April)

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    Handle: RePEc:ags:remaae:37183

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    Keywords: Farm Management;


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    1. E.O. Burns, 1966. "Comparative Analysis Of Farm Accounts," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 10(2), pages 169-182, December.
    2. Shapiro, Kenneth H & Muller, Jurgen, 1977. " Sources of Technical Efficiency: The Roles of Modernization and Information," Economic Development and Cultural Change, University of Chicago Press, vol. 25(2), pages 293-310, January.
    3. Leibenstein, Harvey, 1977. " X-Efficiency, Technical Efficiency, and Incomplete Information Use: A Comment," Economic Development and Cultural Change, University of Chicago Press, vol. 25(2), pages 311-16, January.
    4. Cocks, K.D., 1964. "Creep Budgeting," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 32(03), September.
    5. Musgrave, Warren F., 1976. "Problems Of Change In Australian Agricultural Economics," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 20(03), December.
    6. Burns, E.O., 1966. "Comparative Analysis Of Farm Accounts," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 10(02), December.
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    Cited by:
    1. Herrington, Mark E. & Wegener, Malcolm & Hardner, Craig & Woolcock, Louella L. & Dieters, Mark J., 2012. "Influence of plant traits on production costs and profitability of strawberry in southeast Queensland," Agricultural Systems, Elsevier, vol. 106(1), pages 23-32.
    2. McCown, R. L., 2002. "Locating agricultural decision support systems in the troubled past and socio-technical complexity of `models for management'," Agricultural Systems, Elsevier, vol. 74(1), pages 11-25, October.


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