IDEAS home Printed from https://ideas.repec.org/a/oup/ajagec/v100y2018i1p354-378..html
   My bibliography  Save this article

Deregulation and Productivity: Empirical Evidence on Dairy Production

Author

Listed:
  • Fabian Frick
  • Johannes Sauer

Abstract

We investigate productivity development and its relation to resource reallocation effects in the dairy sector in southeast Germany during the phasing-out of the European Union milk quota. We hypothesize that both extreme output price levels and market deregulation fostered efficient reallocation of production resources. We use a farm-level dataset containing financial accounting data for a period of 15 years. Farm-level productivity is estimated by a proxy variable approach that is robust to endogenous input choice. We compare this approach to other estimation techniques as well as an index-based analysis. After aggregation we decompose sector productivity into unweighted mean productivity and a covariance term measuring the allocation of resources toward more productive farms. We observe an increase in the covariance term coinciding with a period of deregulation efforts and volatile milk prices. We seek to find support for our hypotheses by a regression analysis linking the measure for the potential covariance between resource reallocation and productivity on the one hand, and deregulation as well as price variability on the other. In this analysis we find some empirical evidence for the hypotheses.

Suggested Citation

  • Fabian Frick & Johannes Sauer, 2018. "Deregulation and Productivity: Empirical Evidence on Dairy Production," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 100(1), pages 354-378.
    • Handle: RePEc:oup:ajagec:v:100:y:2018:i:1:p:354-378.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/ajae/aax074
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hongyun Zheng & Wanglin Ma, 2021. "The role of resource reallocation in promoting total factor productivity growth: Insights from China’s agricultural sector," Review of Development Economics, Wiley Blackwell, vol. 25(4), pages 2350-2371, November.
    2. Stefan Wimmer & Johannes Sauer, 2020. "Profitability Development and Resource Reallocation: The Case of Sugar Beet Farming in Germany," Journal of Agricultural Economics, Wiley Blackwell, vol. 71(3), pages 816-837, September.
    3. Kosar, Nataliia & Kuzo, Nataliia & Binda, Jacek & Hayvanovych, Nataliya & Pytulyak, Nataliya, 2022. "Modeling of the factors influencing the dairy market in Ukraine," Agricultural and Resource Economics: International Scientific E-Journal, Agricultural and Resource Economics: International Scientific E-Journal, vol. 8(3), September.
    4. Muxuan Li & Jingbin Wang, 2023. "Will “Dual Control of the Amount and Intensity of Energy Consumption (DCEC)” Policy Increase Urban Green Competitiveness?," Sustainability, MDPI, vol. 15(21), pages 1-19, October.
    5. Ioannis Skevas, 2023. "A novel modeling framework for quantifying spatial spillovers on total factor productivity growth and its components," American Journal of Agricultural Economics, John Wiley & Sons, vol. 105(4), pages 1221-1247, August.
    6. Youngjune Kim & Ji Yong Lee, 2020. "Effects of Government Payments on Agricultural Productivity: The Case of South Korea," Sustainability, MDPI, vol. 12(9), pages 1-11, April.
    7. Lukáš Čechura & Zdeňka Žáková Kroupová & Irena Benešová, 2021. "Productivity and Efficiency in European Milk Production: Can We Observe the Effects of Abolishing Milk Quotas?," Agriculture, MDPI, vol. 11(9), pages 1-21, August.
    8. Emir Malikov & Gudbrand Lien, 2021. "Proxy Variable Estimation of Multiproduct Production Functions," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(5), pages 1878-1902, October.
    9. Maria Martinez Cillero & Michael Wallace & Fiona Thorne & James Breen, 2021. "Analyzing the Impact of Subsidies on Beef Production Efficiency in Selected European Union Countries. A Stochastic Metafrontier Approach," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(5), pages 1903-1923, October.
    10. Doris Läpple & Colin A. Carter & Cathal Buckley, 2022. "EU milk quota abolition, dairy expansion, and greenhouse gas emissions," Agricultural Economics, International Association of Agricultural Economists, vol. 53(1), pages 125-142, January.
    11. Christian Stetter & Johannes Sauer, 2022. "Greenhouse Gas Emissions and Eco-Performance at Farm Level: A Parametric Approach," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 81(3), pages 617-647, March.
    12. Garcia, Luis & Laepple, Doris & Dillon, Emma & Thorne, Fiona, 2020. "The role of hired labor in transient and persistent technical efficiency on Irish dairy farms," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304395, Agricultural and Applied Economics Association.
    13. Levi, Loic & Chavas, Jean-Paul, 2018. "How Does Eliminating Quotas Affect Firm Investment? Evidence from Dairy Farms," 2018 Annual Meeting, August 5-7, Washington, D.C. 273831, Agricultural and Applied Economics Association.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:ajagec:v:100:y:2018:i:1:p:354-378.. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://edirc.repec.org/data/aaeaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.