O-Ring Production on U.S. Hog Farms: Joint Choices of Farm Size, Technology, and Compensation
Abstract� We hypothesize that hog production can be characterized by complementarities between new technologies, worker skills and farms size.� Such production processes are consistent with Kremerâ€™s (1993) O-ring production theory in which a single mistake in any one of several complementary tasks in a firmâ€™s production process can lead to catastrophic failure of the productâ€™s value.� In hog production, mistakes that introduce disease or pathogens into the production facility can cause a total loss of the herd.� Consistent with predictions derived from the O-ring theory, we provide evidence that the most skilled workers concentrate in the largest and most technologically advanced farms and are paid more than comparable workers on smaller farms.� These findings suggest that worker skills, new technologies and farm size are complements in production.� The complementarities create returns to scale to large hog confinements, consistent with the dramatic increase in market share of very large farms over the past 20 years.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 12992.
Date of creation: 28 Jan 2011
Date of revision:
Publication status: Forthcoming in Agricultural Economics
Contact details of provider:
Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
Phone: +1 515.294.6741
Fax: +1 515.294.0221
Web page: http://www.econ.iastate.edu
More information through EDIRC
complementarity; human capital; sorting; technology; farm size; Wages; hogs; O-ring; unobserved skill;
Other versions of this item:
- Li Yu & Peter F. Orazem, 2014. "O-Ring production on U.S. hog farms: joint choices of farm size, technology, and compensation," Agricultural Economics, International Association of Agricultural Economists, vol. 45(4), pages 431-442, 07.
- J43 - Labor and Demographic Economics - - Particular Labor Markets - - - Agricultural Labor Markets
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-10-07 (All new papers)
- NEP-BEC-2008-10-07 (Business Economics)
- NEP-HRM-2008-10-07 (Human Capital & Human Resource Management)
- NEP-LAB-2008-10-07 (Labour Economics)
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.:
- Iranzo, Susana & Schivardi, Fabiano & Tosetti, Elisa, 2006.
"Skill Dispersion and Firm Productivity: An Analysis with Employer-Employee Matched Data,"
CEPR Discussion Papers, C.E.P.R. Discussion Papers
5539, C.E.P.R. Discussion Papers.
- Susana Iranzo & Fabiano Schivardi & Elisa Tosetti, 2008. "Skill Dispersion and Firm Productivity: An Analysis with Employer-Employee Matched Data," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 26(2), pages 247-285, 04.
- S. Iranzo & F. Schivardi & E. Tosetti, 2006. "Skill dispersion and firm productivity: an analysis with employer-employee matched data," Working Paper CRENoS 200617, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
- Susanna Iranzo & Fabiano Schivardi & Elisa Tosetti, 2006. "Skill dispersion and firm productivity; an analysis with employer-employee matched data," Temi di discussione (Economic working papers), Bank of Italy, Economic Research and International Relations Area 577, Bank of Italy, Economic Research and International Relations Area.
- Daron Acemoglu, 2000.
"Technical Change, Inequality, and the Labor Market,"
NBER Working Papers
7800, National Bureau of Economic Research, Inc.
- Daron Acemoglu, 2002. "Technical Change, Inequality, and the Labor Market," Journal of Economic Literature, American Economic Association, vol. 40(1), pages 7-72, March.
- Timothy Dunne & Lucia Foster & John Haltiwanger & Kenneth R. Troske, 2004. "Wage and Productivity Dispersion in United States Manufacturing: The Role of Computer Investment," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 22(2), pages 397-430, April.
- Sophia Rabe-Hesketh, 2007.
"Multilevel modeling of complex survey data,"
West Coast Stata Users' Group Meetings 2007, Stata Users Group
14, Stata Users Group.
- McBride, William D. & Key, Nigel D., 2003. "Economic And Structural Relationships In U.S. Hog Production," Agricultural Economics Reports, United States Department of Agriculture, Economic Research Service 33971, United States Department of Agriculture, Economic Research Service.
- Hurley, Terrance M. & Kliebenstein, James & Orazem, Peter, 1999.
"The Structure of Wages and Benefits in the U.S. Pork Industry,"
Staff General Research Papers, Iowa State University, Department of Economics
1475, Iowa State University, Department of Economics.
- James Kliebenstein & Peter F. Orazem, 1999. "The Structure of Wages and Benefits in the U.S. Pork Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, Agricultural and Applied Economics Association, vol. 81(1), pages 144-163.
- Abdulai, Awudu & Huffman, Wallace, 2007. "The Diffusion of New Agricultural Technologies: The Case of Crossbreeding Technology in Tanzania," Staff General Research Papers, Iowa State University, Department of Economics 12785, Iowa State University, Department of Economics.
- Sophia Rabe-Hesketh & Anders Skrondal & Andrew Pickles, 2004. "GLLAMM Manual," U.C. Berkeley Division of Biostatistics Working Paper Series, Berkeley Electronic Press 1160, Berkeley Electronic Press.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Stephanie Bridges) The email address of this maintainer does not seem to be valid anymore. Please ask Stephanie Bridges to update the entry or send us the correct address.
If references are entirely missing, you can add them using this form.