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Analysis of Technical and Policy Changes for Belgian Dairy Farms Using an Estimated Augmented SGM Cost Function

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  • De Blander, Rembert
  • Frahan, Bruno Henry de

Abstract

This paper provides some evidence on the evolution of marginal and average costs of dairy farms in Belgium between 1990 and 2007. It investigates the effect of the 2003 Mid-Term Review by adding time trends and linear splines to an augmented multi-input multi-output symmetric generalized McFadden cost function and estimating it using a panel of Belgian dairy farms. Existence of size, scale and scope economies in the dairy sub-sector is also examined. This exercise increases our understanding of dairy farm responses to reforms and helps envision the possible effects of ending the milk quota system as it is now planned for 2015.

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File URL: http://purl.umn.edu/114546
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Bibliographic Info

Paper provided by European Association of Agricultural Economists in its series 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland with number 114546.

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Date of creation: 2011
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Handle: RePEc:ags:eaae11:114546

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Keywords: Livestock Production/Industries;

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  1. Lau, Lawrence J., 1986. "Functional forms in econometric model building," Handbook of Econometrics, in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 3, chapter 26, pages 1515-1566 Elsevier.
  2. Diewert, Walter E & Wales, Terence J, 1987. "Flexible Functional Forms and Global Curvature Conditions," Econometrica, Econometric Society, vol. 55(1), pages 43-68, January.
  3. Bruno Henry de Frahan & Alexandre Baudry & Rembert De Blander & Philippe Polomé & Richard Howitt, 2011. "Dairy farms without quotas in Belgium: estimation and simulation with a flexible cost function," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 38(4), pages 469-495, October.
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