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An econometric decomposition of dairy output growth

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  • Ahmad, Munir
  • Boris E., Bravo-Ureta

Abstract

Fixed effects production functions and stochastic production frontiers are estimated and used to decompose dairy farm output growth into technological progress, technical efficiency, and increased input use or the size effect. Unbalanced panel data for ninety-six Vermont dairy farmers for the 1971-84 period are utilized. The results show a 2.5% average annual increase in milk output. About 56% of this growth is attributed to the size effect and the remaining 44% to productivity growth. Technological progress contributed about 94% to total productivity growth, while improvements in technical efficiency accounted for only 6%.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 37678.

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Date of creation: 1995
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Publication status: Published in American Journal of Agricultural Economics 4.77(1995): pp. 915-921
Handle: RePEc:pra:mprapa:37678

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Keywords: dairy output growth; fixed effects; productivity; stochastic frontiers;

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References

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  1. Byrnes, Patricia, et al, 1987. "Technical Efficiency and Size: The Case of Illinois Grain Farms," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 14(4), pages 367-81.
  2. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, Elsevier, vol. 6(1), pages 21-37, July.
  3. Paul W. Bauer, 1988. "Decomposing TFP growth in the presence of cost inefficiency, nonconstant returns to scale, and technological progress," Working Paper 8813, Federal Reserve Bank of Cleveland.
  4. Cornwell, Christopher & Schmidt, Peter & Sickles, Robin C., 1990. "Production frontiers with cross-sectional and time-series variation in efficiency levels," Journal of Econometrics, Elsevier, Elsevier, vol. 46(1-2), pages 185-200.
  5. Bauer, Paul W., 1990. "Recent developments in the econometric estimation of frontiers," Journal of Econometrics, Elsevier, Elsevier, vol. 46(1-2), pages 39-56.
  6. Tauer, Loren W. & Belbase, Krishna P., 1987. "Technical Efficiency Of New York Dairy Farms," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, Northeastern Agricultural and Resource Economics Association, vol. 16(1), April.
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Cited by:
  1. Karagiannis, Giannis & Midmore, Peter & Tzouvelekas, Vangelis, 2002. "Parametric Decomposition of Output Growth: An Input-Distance Function Approach," 2002 International Congress, August 28-31, 2002, Zaragoza, Spain, European Association of Agricultural Economists 24972, European Association of Agricultural Economists.
  2. Giannis Karagiannis & Peter Midmore & Vangelis Tzouvelekas, . "Parametric Decomposition Of Output Growth," Working Papers, University of Crete, Department of Economics 0204, University of Crete, Department of Economics.
  3. Giannis Karagiannis & Vangelis Tzouvelekas, . "Explaining Output Growth With A Heteroscedastic Non-Neutral Production Frontier: The Case Of Sheep Farms In Greece," Working Papers, University of Crete, Department of Economics 0409, University of Crete, Department of Economics.
  4. Munir Ahmad & Azkar Ahmad, 1998. "An Analysis of the Sources of Wheat Output Growth in the Barani Area of the Punjab," The Pakistan Development Review, Pakistan Institute of Development Economics, Pakistan Institute of Development Economics, vol. 37(3), pages 231-249.
  5. Karagiannis, Giannis & Midmore, Peter & Tzouvelekas, Vangelis, 1999. "Separating Technical Change From Time-Varying Technical Inefficiency In The Absence Of Distributional Assumptions," Miscellaneous Papers, Agecon Search 11842, Agecon Search.
  6. Ma, Hengyun & Rae, Allan N. & Huang, Jikun, 2004. "Livestock Productivity In China: Data Revision And Total Factor Productivity Decomposition," China Agriculture Project Working Papers, Massey University, Centre for Applied Economics and Policy Studies 23691, Massey University, Centre for Applied Economics and Policy Studies.
  7. Solis, Daniel & Bravo-Ureta, Boris E. & Quiroga, Ricardo E., 2006. "The Effect Of Soil Conservation On Technical Efficiency: Evidence From Central America," 2006 Annual meeting, July 23-26, Long Beach, CA, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) 21345, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  8. Alvarez, Antonio & del Corral, Julio & Tauer, Loren W., 2012. "Modeling Unobserved Heterogeneity in New York Dairy Farms: One-Stage versus Two-Stage Models," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, Northeastern Agricultural and Resource Economics Association, vol. 41(3), December.
  9. Pierani, Pierpaolo & Rizzi, Pier Luigi, 2003. "Technology and efficiency in a panel of Italian dairy farms: an SGM restricted cost function approach," Agricultural Economics, Blackwell, Blackwell, vol. 29(2), pages 195-209, October.
  10. Langemeier, Michael R. & Jones, Rodney D., 1997. "Measuring the Productivity of Cattle Finishing," 1997 Annual Meeting, July 13-16, 1997, Reno\Sparks, Nevada, Western Agricultural Economics Association 35813, Western Agricultural Economics Association.
  11. Pierani, Pierpaolo & Rizzi, Pier Luigi, 2003. "Technology and efficiency in a panel of Italian dairy farms: an SGM restricted cost function approach," Agricultural Economics: The Journal of the International Association of Agricultural Economists, International Association of Agricultural Economists, International Association of Agricultural Economists, vol. 29(2), October.
  12. Moreira, Victor H. & Bravo-Ureta, Boris E. & Dunner, Roberto & Vidal, Ricardo, 2012. "Total Factor Productivity Change in Dairy Production in Southern Chile: Is Farm Size Significant?," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil, International Association of Agricultural Economists 126895, International Association of Agricultural Economists.
  13. Karagiannis, Giannis & Tzouvelekas, Vangelis, 2001. "Self-Dual Stochastic Production Frontiers And Decomposition Of Output Growth: The Case Of Olive-Growing Farms In Greece," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, Northeastern Agricultural and Resource Economics Association, vol. 30(2), October.
  14. Deng, Xinan & Luo, Yuzhou & Dong, Suocheng & Yang, Xiusheng, 2005. "Impact of resources and technology on farm production in northwestern China," Agricultural Systems, Elsevier, Elsevier, vol. 84(2), pages 155-169, May.
  15. Yanyan Liu & Robert Myers, 2009. "Model selection in stochastic frontier analysis with an application to maize production in Kenya," Journal of Productivity Analysis, Springer, Springer, vol. 31(1), pages 33-46, February.
  16. 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, Agricultural and Applied Economics Association 49293, Agricultural and Applied Economics Association.
  17. Dhehibi, Boubaker & Elloumi, Mohamed, 2009. "Stochastic Production Frontiers and Decomposition of Output Growth: The case of citrus-growing farms in Tunisia," 2009 Conference, August 16-22, 2009, Beijing, China, International Association of Agricultural Economists 49953, International Association of Agricultural Economists.
  18. Liu, Yanyan, 2006. "Model Selection in Stochastic Frontier Analysis: Maize Production in Kenya," 2006 Annual meeting, July 23-26, Long Beach, CA, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) 21281, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  19. Dhehibi, Boubaker & Lachaal, Lassaad & Karray, B. & Chebil, Ali, 2006. "Decomposition of output growth in the Tunisian olive-growing sector: A frontier production function approach," 98th Seminar, June 29-July 2, 2006, Chania, Crete, Greece, European Association of Agricultural Economists 10037, European Association of Agricultural Economists.

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