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The Efficiency of Labor Input in the Tree Nut Growers Industry: A Stochastic Frontier Production Approach Study in Butte County, California


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  • Kuo-Liang Matt Chang

    (Department of Economics,South Dakota State University)

  • Todd A. Lone

    (Department of Agricultural Economics, Jordan College of Agricultural Sciences and Technology, California State University, Fresno)

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    This paper aims to examine the contribution of the labor input to agricultural production efficiency. If an increase in numbers of labor does not increase production efficiency, we should have reason to question the current quantity-oriented labor policies in terms of solving the labor shortage issue. In addition, we want to examine the marginal rate of technical substitution (MRTS) between the labor input and other inputs. The MRTS will provide a clear idea of how labor can be replaced with other inputs without losing total production. Finally, the influence of farm labor on economies of scale and economies of scope will also be discussed. We will investigate whether the scale and size of the farm has a significant role in determining production efficiency for our target farmers.

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    Bibliographic Info

    Paper provided by South Dakota State University, Department of Economics in its series SDSU Working Papers in Progress with number 42009.

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    Length: 21 pages
    Date of creation: Sep 2009
    Date of revision:
    Handle: RePEc:sda:workpa:42009

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    Postal: Box 504, Scobey Hall, Brookings, SD 57007-0895
    Phone: 605-688-4141
    Fax: 605-688-6386
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    Related research

    Keywords: Labor; Stochastic Frontier;

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    1. Paul Bishop & Steven Brand, 2003. "The efficiency of museums: a stochastic frontier production function approach," Applied Economics, Taylor & Francis Journals, vol. 35(17), pages 1853-1858.
    2. Battese, George E. & Corra, Greg S., 1977. "Estimation Of A Production Frontier Model: With Application To The Pastoral Zone Of Eastern Australia," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 21(03), December.
    3. George E. Battese & Greg S. Corra, 1977. "Estimation Of A Production Frontier Model: With Application To The Pastoral Zone Of Eastern Australia," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 21(3), pages 169-179, December.
    4. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
    5. Kalirajan, K P & Shand, R T, 1999. " Frontier Production Functions and Technical Efficiency Measures," Journal of Economic Surveys, Wiley Blackwell, vol. 13(2), pages 149-72, April.
    6. Dawn Thilmany & Steven C. Blank, 1996. "FLCs: An analysis of labor management transfers among California agricultural producers," Agribusiness, John Wiley & Sons, Ltd., vol. 12(1), pages 37-49.
    7. Battese, G E & Coelli, T J, 1995. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data," Empirical Economics, Springer, vol. 20(2), pages 325-32.
    8. Daehoon Nahm & Niramon Sutummakid, 2003. "Efficiency of Agricultural Production in the Central Region of Thailand," Research Papers 0302, Macquarie University, Department of Economics.
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