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An Analysis Of Technical, Allocative, And Scale Inefficiency: The Case Of Ecuadorian Dairy Farms

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Author Info

  • Bailey, DeeVon
  • Biswas, Basudeb
  • Kumbhakar, Subal C.
  • Schulthies, B. Kris

Abstract

The economic efficiency of 68 Ecuadorian dairy farms is investigated by estimating technical, allocative, and scale efficiencies for each using stochastic frontier methodology. Empirical results show that technical inefficiency exists for all of these farms – ranging from 11.8% to 12.8%. Large and medium-sized farms are found to be allocatively more efficient than the small farms as a group. Finally, estimates of scale inefficiency show that most of these farms are producing output at a level below the optimum.

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File URL: http://purl.umn.edu/32456
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Bibliographic Info

Article provided by Western Agricultural Economics Association in its journal Western Journal of Agricultural Economics.

Volume (Year): 14 (1989)
Issue (Month): 01 (July)
Pages:

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Handle: RePEc:ags:wjagec:32456

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Web page: http://waeaonline.org/
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Related research

Keywords: Livestock Production/Industries; Productivity Analysis;

References

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  1. Forsund, Finn R. & Lovell, C. A. Knox & Schmidt, Peter, 1980. "A survey of frontier production functions and of their relationship to efficiency measurement," Journal of Econometrics, Elsevier, vol. 13(1), pages 5-25, May.
  2. Kumbhakar, Subal C., 1987. "The specification of technical and allocative inefficiency in stochastic production and profit frontiers," Journal of Econometrics, Elsevier, vol. 34(3), pages 335-348, March.
  3. Schmidt, Peter & Knox Lovell, C. A., 1979. "Estimating technical and allocative inefficiency relative to stochastic production and cost frontiers," Journal of Econometrics, Elsevier, vol. 9(3), pages 343-366, February.
  4. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
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Citations

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Cited by:
  1. Ingrid Henriksen & Markus Lampe & Paul Sharp, 2010. "The role of technology and institutions for growth: Danish creameries in the late nineteenth century," Working Papers in Economic History wp10-13, Universidad Carlos III, Departamento de Historia Económica e Instituciones.
  2. Coelli, T. J., 1995. "Recent Developments in Frontier Modelling and Efficiency Measurement," 1995 Conference (39th), February 14-16, 1995, Perth, Australia 148798, Australian Agricultural and Resource Economics Society.
  3. Markus Lampe & Paul Sharp, 2014. "Just Add Milk: A Productivity Analysis of the Revolutionary Changes in Nineteenth Century Danish Dairying," Working Papers 0055, European Historical Economics Society (EHES).
  4. Fernandez-Cornejo, Jorge, 1994. "Nonradial Technical Efficiency And Chemical Input Use In Agriculture," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 23(1), April.
  5. Johansson, Helena, 2005. "Technical, Allocative, and Economic Efficiency in Swedish Dairy Farms: The Data Envelopment Analysis Versus the Stochastic Frontier Approach," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24478, European Association of Agricultural Economists.
  6. Fletschner, Diana K. & Zepeda, Lydia, 2002. "Efficiency Of Small Landholders In Eastern Paraguay," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 27(02), December.
  7. Bravo-Ureta, Boris E. & Pinheiro, Antonio E., 1993. "Efficiency Analysis Of Developing Country Agriculture: A Review Of The Frontier Function Literature," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 22(1), April.
  8. Mishra, Ashok K. & El-Osta, Hisham S. & Johnson, James D., 1999. "Factors Contributing To Earnings Success Of Cash Grain Farms," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 31(03), December.
  9. Ford, Stephen A. & Shonkwiler, John Scott, 1994. "The Effect Of Managerial Ability On Farm Financial Success," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 23(2), October.
  10. Michalickova, Monika & Krupova, Zuzana & Krupa, Emil, 2013. "Technical Efficiency and its Determinants in Dairy Cattle," Acta Oeconomica et Informatica, Faculty of Economics and Management, Slovak Agricultural University in Nitra (FEM SPU) & Association of Agricultural Economists in Slovakia (APES), vol. 16(1).

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