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Estimating Production Activity Costs for Multioutput Firms with a Random Coefficient Regression Model

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  • Robert H. Hornbaker
  • Bruce L. Dixon
  • Steven T. Sonka

Abstract

A random coefficient regression model provides an approach for estimating the mean variable costs of specific enterprise production activities for each output over a population of multioutput firms. The model specifically acknowledges that these farm-level costs vary from farm to farm. In addition, best linear unbiased predictions can be estimated for each activity for an individual farm. The mean estimates are quite useful for ex post cost analysis, thereby providing per unit cost estimates for farmers, governmental agencies, and researchers. The best linear unbiased predictions can be used by individual farmers for planning yearly operations, applying for operating loans, and analyzing marketing strategies.

Suggested Citation

  • Robert H. Hornbaker & Bruce L. Dixon & Steven T. Sonka, 1989. "Estimating Production Activity Costs for Multioutput Firms with a Random Coefficient Regression Model," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 71(1), pages 167-177.
    • Handle: RePEc:oup:ajagec:v:71:y:1989:i:1:p:167-177.
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    Citations

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    Cited by:

    1. Letort, Elodie & Carpentier, Alain, 2009. "Endogeneity of acreage choices in input allocation equations: implied problems and a solution," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49217, Agricultural and Applied Economics Association.
    2. J.C. Bureau & Pierre-Alain Jayet & Y. Le Roux, 1992. "Conséquences pour le secteur agricole français de diverses options en matière de réforme de la Politique Agricole Commune," Post-Print hal-02278963, HAL.
    3. Alain Carpentier & Elodie Letort, 2009. "Modeling acreage decisions within the multinomial Logit framework," Working Papers SMART 09-17, INRAE UMR SMART.
    4. Laure Latruffe & Jean Joseph Minviel & Julien Salanié, 2013. "The role of environmental and land transaction regulations on agricultural land price: The example of the French region Brittany," Working Papers SMART 13-11, INRAE UMR SMART.
    5. Kislev, Yoav & Peterson, Willis L., 1991. "Economies Of Scale In Agriculture: A Reexamination Of The Evidence," Staff Papers 13652, University of Minnesota, Department of Applied Economics.
    6. Hansen, Heiko & Surry, Yves R., 2006. "Die Schatzung Verfahrensspezifischer Faktoreinsatzmengen Fur Die Landwirtschaft In Deutschland," 46th Annual Conference, Giessen, Germany, October 4-6, 2006 14959, German Association of Agricultural Economists (GEWISOLA).
    7. Shumway, C. Richard, 1995. "Recent Duality Contributions In Production Economics," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 20(1), pages 1-17, July.
    8. Unknown, 1998. "Commodity Costs and Returns Estimation Handbook (entire book-condensed file)," Commodity Costs and Returns Estimation Handbook,, Iowa State University.
    9. Desbois, Dominique & Butault, Jean-Pierre & Surry, Yves, 2017. "Distribution des coûts spécifiques de production dans l’agriculture de l’Union européenne : une approche reposant sur la régression quantile‪," Économie rurale, French Society of Rural Economics (SFER Société Française d'Economie Rurale), vol. 361(September).
    10. Latruffe, Laure & Salanié, Julien & Minvie, Jean Joseph, 2013. "The Role of Environmental and Land Transaction Regulations on Agricultural Land Price: The example of Brittany," Working papers 157111, Factor Markets, Centre for European Policy Studies.
    11. Argiles, Josep M. & Brown, Nestor Duch, 2011. "A comparison of the economic and environmental performances of conventional and organic farming: evidence from financial statements," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 11(1), pages 1-18, January.
    12. Letort, Elodie & Carpentier, Alain, 2009. "On Modelling Acreage Decisions within the Multinomial Logit Framework," 2009 Conference, August 16-22, 2009, Beijing, China 51615, International Association of Agricultural Economists.
    13. Unknown, 1998. "References/Literature Cited," Commodity Costs and Returns Estimation Handbook,, Iowa State University.
    14. Hansen, H. & Surry, Y., 2007. "Die Schätzung verfahrensspezifischer Faktoreneinsatzmengen für die Landwirtschaft in Deutschland," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 42, March.
    15. Letort, Elodie & Carpentier, Alain, 2010. "Variable Input Allocation: Why Heterogeneity Matters?," 120th Seminar, September 2-4, 2010, Chania, Crete 109387, European Association of Agricultural Economists.
    16. Argiles, Josep M. & Brown, Nestor Duch, 2011. "A comparison of the economic and environmental performances of conventional and organic farming: evidence from financial statements," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 11(1), pages 1-18, January.
    17. Mafoua, Edouard & Hossain, Ferdaus, 2001. "Scope And Scale Economies For Multi-Product Farms: Firm-Level Panel Data Analysis," 2001 Annual meeting, August 5-8, Chicago, IL 20627, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    18. Mafoua, Edouard, 2002. "Economies Of Scope And Scale Of Multi-Product U.S. Cash Grain Farms: A Flexible Fixed-Cost Quadratic (Ffcq) Model Analysis," 2002 Annual meeting, July 28-31, Long Beach, CA 19734, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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