IDEAS home Printed from https://ideas.repec.org/p/isu/genstf/198001010800008119.html
   My bibliography  Save this paper

An economic analysis of the corn production efficiency of Iowa farm firms

Author

Listed:
  • Rahm, Michael Robert

Abstract

Disequilibria in product and factor markets force firms to adjust production and reallocate resources. In a dynamic economic environment, production efficiency will depend upon the technical and allocative abilities of farm operators. The human capital approach hypothesizes that technical and allocative abilities are learned as opposed to innate skills;Agriculture is a logical industry to choose for investigating sources of differential firm efficiency. Modern agriculture is characterized by dynamic product and factor markets, rapid technological advances and a relatively uncomplicated management structure. Conceptual models of agricultural production efficiency are formulated. A model of technical efficiency is constructed for analyzing differential rates of adoption and utilization of a single production technology. A model of allocative efficiency is developed for analyzing relative cost efficiency;The corn production efficiency of Iowa farm firms is investigated in the empirical specification and estimation of the models. The data set is the 1976 Iowa Family Farm Survey. The cross-sectional survey of 933 Iowa farm families was designed and conducted by the Statistical Laboratory of Iowa State University;Technical efficiency is analyzed for the type of tillage practice used in corn production. A regression model including variables for profitability and human capital is specified for analyzing differential rates of adoption and utilization of reduced tillage practices. Empirical results indicate that operators of farms with larger corn enterprises, relatively large soybean enterprises, and light, sandy soils will more likely adopt and more fully utilize reduced tillage practices. In addition, the estimates indicate that operators who have completed more years of formal schooling and who frequently utilize information from agricultural extension programs more likely adopt and more fully utilize reduced tillage practices;Allocative efficiency is analyzed for relative cost efficiency in corn production. A measure of relative cost efficiency, the percentage by which actual variables cost differs from a theoretical minimum cost, is derived. A regression model including variables for scale and human capital is specified for analyzing differential cost efficiency. Although there exists considerable noise in the model, empirical results indicate that operators with greater years of farm management experience are more cost efficient relative to operators with fewer years of experience.

Suggested Citation

  • Rahm, Michael Robert, 1980. "An economic analysis of the corn production efficiency of Iowa farm firms," ISU General Staff Papers 198001010800008119, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genstf:198001010800008119
    as

    Download full text from publisher

    File URL: https://dr.lib.iastate.edu/server/api/core/bitstreams/00eb5b95-9600-4344-aa94-e79fbe6476e8/content
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Amemiya, Takeshi, 1973. "Regression Analysis when the Dependent Variable is Truncated Normal," Econometrica, Econometric Society, vol. 41(6), pages 997-1016, November.
    2. Nabil Khaldi, 1975. "Education and Allocative Efficiency in U.S. Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 57(4), pages 650-657.
    3. Welch, F, 1970. "Education in Production," Journal of Political Economy, University of Chicago Press, vol. 78(1), pages 35-59, Jan.-Feb..
    4. Wozniak, Gregory Dean, 1980. "The adoption decision: a human capital approach," ISU General Staff Papers 198001010800008144, Iowa State University, Department of Economics.
    5. Lau, Lawrence J & Yotopoulos, Pan A, 1971. "A Test for Relative Efficiency and Application to Indian Agriculture," American Economic Review, American Economic Association, vol. 61(1), pages 94-109, March.
    6. Sidhu, Surjit S, 1974. "Relative Efficiency in Wheat Production in the Indian Punjab," American Economic Review, American Economic Association, vol. 64(4), pages 742-751, September.
    7. Schultz, Theodore W, 1975. "The Value of the Ability to Deal with Disequilibria," Journal of Economic Literature, American Economic Association, vol. 13(3), pages 827-846, September.
    8. French, Ben C., 1977. "The Analysis of Productive Efficiency in Agricultural Marketing: Models, Methods, and Progress," A Survey of Agricultural Economics Literature, Volume 1: Traditional Fields of Agricultural Economics 1940s to 1970s,, Agricultural and Applied Economics Association.
    9. Timmer, C. Peter, 1970. "Front Matter & On Measuring Technical Efficiency," Food Research Institute Studies, Stanford University, Food Research Institute, vol. 9(2), pages 1-78.
    10. Kislev Yoav & Nira Shchori-Bachrach, 1973. "The Process of an Innovation Cycle," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 55(1), pages 28-37.
    11. Edwin Mansfield, 1963. "The Speed of Response of Firms to New Techniques," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 77(2), pages 290-311.
    12. Pidgeon, Edward Robert, 1977. "Energy conservation possibilities in corn production on a central Iowa farm," ISU General Staff Papers 1977010108000018126, Iowa State University, Department of Economics.
    13. Wallace E. Huffman, 1977. "Allocative Efficiency: The Role of Human Capital," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 91(1), pages 59-79.
    14. Globerman, Steven, 1975. "Technological Diffusion in the Canadian Tool and Die Industry," The Review of Economics and Statistics, MIT Press, vol. 57(4), pages 428-434, November.
    15. Fane, George, 1975. "Education and the Managerial Efficiency of Farmers," The Review of Economics and Statistics, MIT Press, vol. 57(4), pages 452-461, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:eee:labchp:v:1:y:1986:i:c:p:357-386 is not listed on IDEAS
    2. Hildreth, R.J. & Bentley, Orville G. & Johnson, Glenn L. & Tweeten, Luther & Mellor, John W. & Bromley, Daniel W. & Pope, Rulon D. & Leman, Christopher K. & Paarlberg, Robert L. & King, R.P. & Sonka, , 1985. "Agriculture and Rural Areas Approaching the Twenty-first Century: Challenges for Agricultural Economics," 1985 Annual Meeting, August 4-7, Ames, Iowa 278707, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Wozniak, Gregory Dean, 1980. "The adoption decision: a human capital approach," ISU General Staff Papers 198001010800008144, Iowa State University, Department of Economics.
    4. Marcos Gallacher, 2011. "Returns to Managerial Ability: Dairy Farms in Argentina," CEMA Working Papers: Serie Documentos de Trabajo. 478, Universidad del CEMA.
    5. Yang, Dennis Tao & An, Mark Yuying, 2002. "Human capital, entrepreneurship, and farm household earnings," Journal of Development Economics, Elsevier, vol. 68(1), pages 65-88, June.
    6. Gallacher, M. & Lema, D., 2018. "Returns to Managerial Ability and Technical Efficiency in Argentina Dairy Farms," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277323, International Association of Agricultural Economists.
    7. Gurgand, Marc, 2003. "Farmer education and the weather: evidence from Taiwan (1976-1992)," Journal of Development Economics, Elsevier, vol. 71(1), pages 51-70, June.
    8. Jolliffe, Dean, 2004. "The impact of education in rural Ghana: examining household labor allocation and returns on and off the farm," Journal of Development Economics, Elsevier, vol. 73(1), pages 287-314, February.
    9. Ekanayake, S.A.B. & Jayasuriya, Sisira, 1989. "Change, Adjustment And The Role Of Specific Experience: Evidence From Sri Lankan Rice Farming," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 33(2), pages 1-13, August.
    10. Rahm, Michael R. & Huftman, Wallace E., 1982. "The Adoption Of Reduced Tillage: The Role Of Human Capital And Other Variables," 1982 Annual Meeting, August 1-4, Logan, Utah 279129, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    11. Marcos Gallacher, 2008. "The impact of human capital on firm-level input use: Argentine agriculture," CEMA Working Papers: Serie Documentos de Trabajo. 380, Universidad del CEMA.
    12. Tao Yang, Dennis, 2004. "Education and allocative efficiency: household income growth during rural reforms in China," Journal of Development Economics, Elsevier, vol. 74(1), pages 137-162, June.
    13. Peterson, Willis L. & Hayami, Yujiro, 1977. "Technical Change in Agriculture," A Survey of Agricultural Economics Literature, Volume 1: Traditional Fields of Agricultural Economics 1940s to 1970s,, Agricultural and Applied Economics Association.
    14. Biagia De Devitiis & Ornella Wanda Maietta, 2015. "Shadow Prices of Human Capital in Agriculture. Evidence from European FADN Regions," CSEF Working Papers 415, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    15. Tegene, Abebayehu & Effland, Anne & Ballenger, Nicole & Norton, George W. & Essel, Albert E. & Larson, Gerald & Clarke, Winfrey, 2002. "Investing in People: Assessing the Economic Benefits of 1890 Institutions," Miscellaneous Publications 33548, United States Department of Agriculture, Economic Research Service.
    16. Marcos Gallacher, 2021. "Knowledge, prices and factor demand: Fertilizers in Argentine Agriculture," CEMA Working Papers: Serie Documentos de Trabajo. 811, Universidad del CEMA.
    17. Shapiro, B.I. & Brorsen, B.Wade & Doster, D. Howard, 1992. "Adoption of Double-Cropping Soybeans and Wheat," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 24(2), pages 33-40, December.
    18. L.R. Maglen, 1990. "Challenging the Human Capital Orthodoxy: The Education‐Productivity Link Re‐examined," The Economic Record, The Economic Society of Australia, vol. 66(4), pages 281-294, December.
    19. Kinvi D.A. Logossah, 1994. "Capital humain et croissance économique : une revue de la littérature," Économie et Prévision, Programme National Persée, vol. 116(5), pages 17-34.
    20. Antle, John M., 1980. "A Dynamic Optimization Model Of Firm Behavior In The Context Of Uncertainty And Technical Change," Working Papers 225687, University of California, Davis, Department of Agricultural and Resource Economics.
    21. Phanhpakit ONPHANHDALA, 2009. "Farmer Education and Agricultural Efficiency: Evidence from Lao PDR," GSICS Working Paper Series 20, Graduate School of International Cooperation Studies, Kobe University.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:isu:genstf:198001010800008119. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Curtis Balmer (email available below). General contact details of provider: https://edirc.repec.org/data/deiasus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.