Scale Economies and Consolidation in Hog Slaughter

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Scale Economies and Consolidation in Hog Slaughter

Author Info

James M MacDonald
Michael E Ollinger

Abstract

We use establishment based panel data to estimate a cost function which identifies the role of scale economies in hog slaughter consolidation. We find modest by extensive technological scale economies in the 1990s, and they became more important over time. But wages rose sharply with plant size through the 1970s and those wage premiums generated a pecuniary scale diseconomy that largely offset the effects of technological scale economies. The size-wage relation disappeared in the 1980; with growing technological scale economies and disappearing pecuniary diseconomies, large plants realized growing cost advantages over smaller plants, and production shifted to larger plants.

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Paper provided by Center for Economic Studies, U.S. Census Bureau in its series Working Papers with number 00-03.

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Date of creation: Mar 2000
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Handle: RePEc:cen:wpaper:00-03

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

Stevenson, Rodney, 1980. "Measuring Technological Bias," American Economic Review, American Economic Association, vol. 70(1), pages 162-73, March. [Downloadable!] (restricted)
Allen, W Bruce & Liu, Dong, 1995. "Service Quality and Motor Carrier Costs: An Empirical Analysis," The Review of Economics and Statistics, MIT Press, vol. 77(3), pages 499-510, August. [Downloadable!] (restricted)

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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

Gervais, Jean-Philippe, 2007. "Disentangling non-linearities in the long- and short-run price relationships: An application to the U.S. hog/Pork supply chain," MPRA Paper 7743, University Library of Munich, Germany, revised 15 Jan 2008. [Downloadable!]
Gervais, J.P. & Bonroy, O. & Couture, S., 2007. "A province-level analysis of economies of scale in Canadian food processing," Working Papers 200710, Grenoble Applied Economics Laboratory (GAEL). [Downloadable!]
Gervais, Jean-Philippe & Bonroy, Olivier & Couture, Steve, 2006. "Economies of Scale in the Canadian Food Processing Industry," MPRA Paper 64, University Library of Munich, Germany. [Downloadable!]

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This page was last updated on 2008-8-19.

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