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Land Fragmentation and Market Integration - Heterogeneous Technologies in Kosovo

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  • Sauer, Johannes
  • Davidova, Sophia
  • Gorton, Matthew

Abstract

This paper empirically measures the prevalence of heterogeneous technologies in a sample of small-scale agricultural producers as an answer to structural conditions and market risks. Such risks are closely linked to the effects of land fragmentation and the degree of market integration. We use the empirical case of Kosovo as a transition country to investigate the efficiency effects of land fragmentation by simultaneously considering the effects of market integration. Different to previous studies, we assume that land fragmentation and market integration lead to the prevalence of heterogeneous technologies allowing farm households to respond more efficiently to exogenous price and policy shocks given their fragmentation and subsistence situation. The empirical work links the latent class frontier method to the estimation of a directional output distance function. We estimate beside primal technology measures also dual Morishima type elasticities of substitution investigating changes in production decisions based on relative shadow price changes.

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Bibliographic Info

Paper provided by German Association of Agricultural Economists (GEWISOLA) in its series 52nd Annual Conference, Stuttgart, Germany, September 26-28, 2012 with number 137385.

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Date of creation: 2012
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Handle: RePEc:ags:gewi12:137385

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Keywords: Land fragmentation; market integration; farm households; Landfragmentierung; Marktintegration; Farmhaushalte; Kosovo; Land Economics/Use; O13; Q12;

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  1. Wu, Ziping & Liu, Minquan & Davis, John, 2005. "Land consolidation and productivity in Chinese household crop production," China Economic Review, Elsevier, vol. 16(1), pages 28-49.
  2. del Corral, Julio & Alvarez, Antonio & Tauer, Loren W., 2009. "Detecting Technological Heterogeneity in New York Dairy Farms," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49293, Agricultural and Applied Economics Association.
  3. Laure Latruffe & Kelvin Balcombe & Sophia Davidova & Katarzyna Zawalinska, 2004. "Determinants of technical efficiency of crop and livestock farms in Poland," Applied Economics, Taylor & Francis Journals, vol. 36(12), pages 1255-1263.
  4. Greene, William, 2005. "Reconsidering heterogeneity in panel data estimators of the stochastic frontier model," Journal of Econometrics, Elsevier, vol. 126(2), pages 269-303, June.
  5. Fare, Rolf & Grosskopf, Shawna & Noh, Dong-Woon & Weber, William, 2005. "Characteristics of a polluting technology: theory and practice," Journal of Econometrics, Elsevier, vol. 126(2), pages 469-492, June.
  6. Luis Orea & Subal C. Kumbhakar, 2004. "Efficiency measurement using a latent class stochastic frontier model," Empirical Economics, Springer, vol. 29(1), pages 169-183, January.
  7. Van Hung, Pham & MacAulay, T. Gordon & Marsh, Sally P., 2007. "The economics of land fragmentation in the north of Vietnam," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 51(2), June.
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  9. Sophia Davidova, 2011. "Semi‐Subsistence Farming: An Elusive Concept Posing Thorny Policy Questions," Journal of Agricultural Economics, Wiley Blackwell, vol. 62(3), pages 503-524, 09.
  10. Subal Kumbhakar & Efthymios Tsionas & Timo Sipiläinen, 2009. "Joint estimation of technology choice and technical efficiency: an application to organic and conventional dairy farming," Journal of Productivity Analysis, Springer, vol. 31(3), pages 151-161, June.
  11. Sauer, Johannes & Davidova, Sophia & Latruffe, Laure, 2010. "Determinants of smallholders’ decisions to leave land fallow: the case of Kosovo," 118th Seminar, August 25-27, 2010, Ljubljana, Slovenia 94917, European Association of Agricultural Economists.
  12. Blarel, Benoit, et al, 1992. "The Economics of Farm Fragmentation: Evidence from Ghana and Rwanda," World Bank Economic Review, World Bank Group, vol. 6(2), pages 233-54, May.
  13. Chen, Zhuo & Huffman, Wallace & Rozelle, Scott, 2006. "Farm Technology and Technical Efficiency: Evidence from Four Regions in China," Staff General Research Papers 12605, Iowa State University, Department of Economics.
  14. David I. Stern, 2004. "Elasticities of Substitution and Complementarity," Rensselaer Working Papers in Economics 0403, Rensselaer Polytechnic Institute, Department of Economics.
  15. Chambers, Robert G. & Chung, Yangho & Fare, Rolf, 1996. "Benefit and Distance Functions," Journal of Economic Theory, Elsevier, vol. 70(2), pages 407-419, August.
  16. Kelvin Balcombe & Iain Fraser & Jae Kim, 2006. "Estimating technical efficiency of Australian dairy farms using alternative frontier methodologies," Applied Economics, Taylor & Francis Journals, vol. 38(19), pages 2221-2236.
  17. Jean-Paul Chavas & Ragan Petrie & Michael Roth, 2005. "Farm Household Production Efficiency: Evidence from The Gambia," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(1), pages 160-179.
  18. Battese, G E & Coelli, T J, 1995. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data," Empirical Economics, Springer, vol. 20(2), pages 325-32.
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