Technological Change and Economies of Scale in Danish Agriculture

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Technological Change and Economies of Scale in Danish Agriculture

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Rasmussen, Svend

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Svend Rasmussen

Abstract

This paper presents the results of an empirical analysis of technological change and economies of scale in Danish agriculture. The estimation is based on a multi-output, multi-input translog cost function and covers the period 1973-1995. The results show that technological change varied considerably. The average rate of technological change was highest on arable farms (4.0% per year) and lowest on dairy farms (1.0% per year), with pig farms in between (2.2% per year). Alt three farm types showed an increasing trend in technological change over time, and technological changes were typically biased. The elasticity of size was considerably above 1 for both small and large arable farms and dairy farms indicating a considerable economic incentive to increase the farm size. For pig farms only the small farms showed a clear incentive to increase the farm size. The results support the hypothesis that policy measures have had a significant influence on the differences in development within the three farm types analysed.

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Paper provided by Royal Veterinary and Agricultural University, Food and Resource Economic Institute in its series Unit of Economics Working papers with number 24185.

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Date of creation: 2000
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Handle: RePEc:ags:rvaewp:24185

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Hanoch, Giora, 1975. "The Elasticity of Scale and the Shape of Average Costs," American Economic Review, American Economic Association, vol. 65(3), pages 492-97, June. [Downloadable!] (restricted)
Fare, Rolf & Shawna Grosskopf & Mary Norris & Zhongyang Zhang, 1994. "Productivity Growth, Technical Progress, and Efficiency Change in Industrialized Countries," American Economic Review, American Economic Association, vol. 84(1), pages 66-83, March. [Downloadable!] (restricted)
Christensen, Laurits R & Jorgenson, Dale W & Lau, Lawrence J, 1973. "Transcendental Logarithmic Production Frontiers," The Review of Economics and Statistics, MIT Press, vol. 55(1), pages 28-45, February. [Downloadable!] (restricted)

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