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Does Access to Modern Marketing Channels Improve Dairy Enterprises’ Efficiency? A Case Study of Punjab, Pakistan

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  • Sana Sadaf
  • Khalid Riaz

    (Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan.)

Abstract

The main objective of this study is to investigate how access to modern marketing channels impacts the efficiency of dairy enterprises. Using data on dairy farms in central Punjab (Sargodha), we carry out a nonparametric data envelopment analysis to measure their technical and scale efficiencies. The results show that, for the sample dairy enterprises, the mean technical efficiency under variable returns to scale was 0.89 while scale efficiency was 0.94. The results of a follow-on regression analysis support the hypothesis that the access to modern marketing channels, where payment for fresh milk is based on measured milk quality (fat content), improved efficiency. We find that efficiency is positively affected by the size of dairy operations, and negatively by the size of operational land area. Moreover, dairy enterprises with smaller herds tend to operate at a suboptimal scale, possibly due to credit and/or land constraints.

Suggested Citation

  • Sana Sadaf & Khalid Riaz, 2012. "Does Access to Modern Marketing Channels Improve Dairy Enterprises’ Efficiency? A Case Study of Punjab, Pakistan," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 17(1), pages 63-82, Jan-June.
    • Handle: RePEc:lje:journl:v:17:y:2012:i:1:p:63-82
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    References listed on IDEAS

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    More about this item

    Keywords

    Dairy; marketing; Punjab; Pakistan.;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

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